Armstrong came to Verizon in 2015 as part of the acquisition of AOL, where he was CEO. The company later bought Yahoo and combined the two divisions into a digital advertising unit called Oath but those efforts have yet to produce significant growth. Verizon has decided to integrate Oath more fully with the rest of the company's operations, according to a recent Wall Street Journal report, despite recent discussions about spinning off Oath into a separate business.
Oath president and COO K. Guru Gowrappan will "assume all management responsibilities" as chief executive effective Oct. 1, the company said in a release.
"Guru has proven experience in scaling businesses globally. I'm thrilled he will lead Oath in an exciting new phase of growth, building on the foundation Tim and his team have created," Verizon CEO Hans Vestberg said in a statement.
The move could signal a shift in Verizon's media and advertising strategy, which has increasingly diverged in recent months from that of its closest competitor AT&T. In June, AT&T completed its purchase of Time Warner, launching an advertising-focused strategy that several smaller acquisitions.
Verizon aimed to compete with Google and Facebook in the digital advertising marketplace with Oath. Instead, the business unit is expected to lose share of the market, which continues to be dominated by the two technology giants, the WSJ said.
Armstrong sent the following statement to Oath employees:
After almost 10 years as CEO - a journey of teamwork that has included turning around AOL while outperforming the market, strategically combining AOL with Verizon, and creating one of the largest digital assets in the world with the acquisition of Yahoo to create Oath - I am handing off the CEO torch for the next stage of the race to Guru.
After joining us from Alibaba at the start of Q2, Guru has been leading global consumer and revenue operations and has worked tirelessly to execute Oath's strategic mission and operating plan. With our closer alignment with Verizon, Oath and Guru will be able to unlock a series of continued growth opportunities similar to the investments that Verizon has put into the Oath Super Channels and Apps.
While there has been and will be speculation about these changes, there are a few important signals that should not get lost in the noise. The first is that the world has gone digital and few companies have both mobile and digital assets at our scale. Add to that the backing of the best mobile company in the world - Verizon - and Oath has all of the right pieces to succeed. The second point is that things take time. It took more than two and a half years to turn AOL around; Oath is just over a year old and the first year was spent integrating the post-Yahoo auction assets and working through the data breach related issues. It is going to take time for Oath to reach its full potential.
Lastly, and most importantly, our brands and our talent matter in real ways and make a positive impact on hundreds of millions of lives around the world. Yahoo Finance is one of the largest financial news and data platforms in the world, TechCrunch and Crunchbase are two of the largest providers of tech information in the world, Yahoo Fantasy Sports provides millions of sports fans a deep community for their most passionate interests, Yahoo and AOL Mail & Search products serve our most valuable audiences, and our newly launched and unified Oath Ad Platforms provides the world's most important brands and publishers a growth engine for their businesses.
What has been most memorable and impressive over the last 10 years is the work done by our people and our leaders. There are no words to describe how I feel about the people I have worked with and the leadership they have shown. Many times the only path forward was to blaze a new path. One of the more meaningful trails we blazed has been around women - with the founding of two companies, MAKERS and #BUILTBYGIRLS. Both companies have made significant contributions in telling groundbreaking women's stories and supporting female founders.
Over the years, we have not only built brands people love, but also bonds with each other and communities around the world through Oath for Good and your volunteering efforts. Across the globe we have touched millions of lives and have made a lasting impact on hundreds of non-profit organizations.
Thank you to my executive team at Oath, a super special group of people, as well as my amazing support staff Enrique, Katherine and Corinne. And thank you to all of the support teams across the company - the food service teams, building security teams, and janitorial teams - your work allows everyone else to do theirs and it is greatly appreciated.
From Taipei to Tel Aviv, Dublin to Chicago, Tokyo to Bangalore, São Paulo to Los Angeles, and all of the places in between - and of course NYC, Dulles, and Sunnyvale - the torch is passed and the next leg of the journey begins. As a strategic advisor to Verizon, I will work closely with Guru to continue the strategic moves we have been making and fully leverage the power of Verizon and Oath for our global consumer base and customer base.
Build Brands Members Love & Live Your Oath - TA
Shares of Verizon were largely unchanged following the announcement, up 0.5 percent in trading Wednesday.
– CNBC's Jillian D'Onfro contributed to this report.
Correction: Tim Armstrong joined Verizon with the acquisition of AOL in 2015, when Yahoo was not yet part of the company. Verizon bought Yahoo in 2017, and rebranded some assets acquired in both deals as Oath.