Verizon + Yahoo = Trouble For Consumers?
Verizon proposed on July 25 to buy Yahoo’s core assets - search, mail, instant messaging, and editorial content - for $4.83 billion. The long-anticipated deal is expected to close in early 2017, marking the end of a venerable Internet pioneer as an independent entity. But the deal could have negative consequences for consumers. Read on for the full story...
How Will the Verizon-Yahoo Merger Affect You?
Most media coverage of the Verizon-Yahoo merger discusses its effects on the two companies, advertisers, and competitors. But a handful of pundits, including yours truly, are more concerned about what the combination of a mega-ISP and a mega-content generator may mean for consumers.
Yahoo draws roughly a billion visitors monthly to its sites such as Yahoo Sports, Yahoo Finance, Yahoo Mail, Tumblr and Flickr. In spite of those impressive traffic stats, the company managed to lose over $4 billion in the last quarter of 2015. By comparison, AOL - Verizon’s $4.4 billion acquisition of last year - pulls only 130 million visitors. Both are dwarfed by Google News and Facebook, but Yahoo still represents a massive increase in editorial content for Verizon’s ambitious future plan.
That plan is to escape the commoditized, saturated market of telephony. Two-thirds of Americans now have smartphones, and that’s about everyone who wants one. Cellular service is essentially the same from one carrier to another. The only way Verizon or any other telco can grow is by stealing customers from competitors. That means cutting price, and Verizon is notoriously loath to do so. So Verizon plans to grow by adding a new revenue stream -- advertising.
Global advertisers face a duopoly of Google and Facebook. Verizon wants to be their Third Choice, the new kid on the block who offers better bang for the buck. “Better” for advertisers is invariably worse for consumers’ privacy. Verizon, a major national ISP, is able and all too willing to invade its customers’ privacy.
I described one of Verizon’s dastardly tricks in my 2014 article, “EVIL -- Perma-Cookies and Your Privacy”. For years, Verizon tracked its customers’ online and real-world movements using “supercookies” that customers could not delete because they were stored on Verizon’s servers, not on users’ devices. The aggregated data was sold to marketers, who put it to unknown uses.
Dirty Deeds Done Cheap
Furthermore, Verizon did not inform customers that they were being tracked or give them the opportunity to opt out of tracking, as required by the Communications Act. That led to an FCC complaint that was finally settled in March, 2016, for the piddling sum of $1.35 million.
The unholy combination of an ISP and a content provider creates the potential for even more dirty deeds. Verizon has declared its support for the concept of Net Neutrality, under which all ISPs are expected to treat all Internet content equally. But violations of that principle can be subtle and hard to catch, even though they give a decided edge to an ISP’s own content and its accompanying advertisements.
Verizon, which handles every request for Web content that its customers make, is perfectly positioned to know what their online habits are to the finest details. Google and Facebook can only infer, and advertisers prefer certainty.
How far Verizon will push the rules protecting customers’ privacy and control of their online experiences is anyone’s guess. But with its nearly $5 billion price tag for the acquisition of Yahoo, Verizon has a great deal more incentive to push too far and too hard.
Your thoughts on this topic are welcome. Post your comment or question below...
This article was posted by Bob Rankin on 5 Aug 2016
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Article information: AskBobRankin -- Verizon + Yahoo = Trouble For Consumers? (Posted: 5 Aug 2016)
Copyright © 2005 - Bob Rankin - All Rights Reserved