Verizon just hit the data jackpot with Yahoo's billion users
Verizon's purchase of Yahoo and, separately, its growth in wireless means the company has access to more consumer data than ever before. That information could become one of its most valuable assets as it seeks to become an advertising giant.
Information — including where people are, what they are watching on TV and what type of hand soap they buy online — is used to power advertising technology. The more details a company has on a person's behavior, the more tailored the digital ads can be.
"Verizon wants to be a singular source of technology and content for consumers and a singular place where advertisers can go to access that consumer," said Shar VanBoskirk, vice president and principal analyst at technology and market research firm Forrester Research.
Verizon posted second-quarter earnings of 94 cents per share on Tuesday, slightly higher than the Thomson Reuters consensus of 92 cents. Its revenue came in at $30.54 billion, slightly under the estimate of $30.94 billion. In its earnings report, the telecommunications company touted the growth in its wireless division, saying its retail postpaid net additions — a key metric for the all-important monthly mobile subscribers — increased 3.3 percent year over year.
On Monday, Verizon announced its plans to acquire Yahoo for $4.83 billion. The media giant has more than 1 billion monthly active users, 600 million of whom access their sites on mobile.
"Verizon is trying to create a surround-sound experience for customers and advertisers," VanBoskirk said. "Verizon has access to you through your cable set-top box. Now, it's going to have access to your internet behavior."
Last year, the telecommunications company purchased AOL for $4.4 billion. With the combination of Yahoo and AOL's massive online audiences, Verizon's reach now rivals top competitors like Facebook and Google.
"Scale is a major differentiator," said Adam Berke, AdRoll president and chief marketing officer. "Each of these companies on their own didn't have enough audience to meet the market. These kind of roll-ups are going to become increasingly frequent as data becomes more important."
Verizon has also made other commitments to creating millennial-targeted digital content. Its Go90 service, which launched in October 2015, provides short-form video content for digitally minded viewers.
In April, Verizon purchased Complex Media in partnership with Hearst, and acquired about a quarter of media and entertainment company AwesomenessTV, which is majority owned by DreamWorks Animation. The month prior, Verizon and Hearst launched Rated Red, a network for middle-America millennials, and Seriously.TV, a comedy news channel. Not only are these publications intended to attract millennial eyes, but the company gets data on a highly coveted consumer demographic.
"The advantage Verizon had against Google is it has offline access to information on what I'm doing, when I'm watching cable or on my mobile phone," she said. "Now, Verizon is positioning itself as an internet giant. It's bought the biggest internet players there are. They have some street cred in the internet space."
Disclosure: CNBC has a content-sharing partnership with Yahoo's finance site.