Oath Chief Executive Officer Tim Armstrong is unsurprised with the amount of scrutiny looming over AT&T’s proposed acquisition of Time Warner valued at $85.6 billion, the industry veteran suggested during a recent interview with CNN. While big business mergers have been an established practice for decades now, the new consolidation trend is indicative of growing interest in cross-industry tie-ups, i.e. vertical mergers that don’t directly eliminate any competition from the market but are potentially even more valuable for the buying party, allowing it to entrench itself even deeper into the domestic economy, Mr. Armstrong indicated.
That state of affairs is what prompted the United States Department of Justice to attempt blocking AT&T’s Time Warner bid with a lawsuit, with that outcome being expected given the amount of corporate power the wireless carrier stands to gain from the deal, according to the executive. “It’s a giant signal of how Washington is going to treat M&A overall [going forward],” Mr. Armstrong said while reflecting on AT&T’s recent legal issues with the DOJ. Oath’s CEO also expects T-Mobile and Sprint’s newly proposed merger to be subjected to a comparable level of federal scrutiny at the very least, though he isn’t concerned about how that deal might affect Verizon and its digital unit if it’s approved. Verizon’s unit created through the combination of its AOL and Yahoo acquisitions presently boasts approximately a billion customers around the globe and is expected to continue growing moving forward, especially as its services portfolio places an even larger emphasis on mobile platforms, Mr. Armstrong suggested.
Oath is also planning on pursuing enhanced digital privacy protections in the future, with its CEO labeling that segment as “one of the battleground areas” where the tech industry will soon start fighting for customers much more aggressively. Oath recorded a 13-percent sequential decline in quarterly revenue over the first three months of 2018, with Verizon labeling that performance drop as unsurprising given the seasonal decline in advertiser spending it usually sees following every holiday season, according to the telecom giant’s latest consolidated financial report.