Verizon's Metamorphosis: Can You See Me As A Tech Giant Now? : All Tech Considered Verizon has transformed from a child of the Bell monopoly to parent of tech legends AOL and Yahoo. It wants to play with Google and Facebook — but don't expect a full transformation just yet.
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Verizon's Metamorphosis: Can You See Me As A Tech Giant Now?

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Verizon's Metamorphosis: Can You See Me As A Tech Giant Now?

Verizon's Metamorphosis: Can You See Me As A Tech Giant Now?

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STEVE INSKEEP, HOST:

Now let's follow a company trying to buy its way into the future. Verizon is a descendant of the old Bell monopoly phone system. Lately, the company has been acquiring tech firms like AOL and Yahoo. NPR's Alina Selyukh reports on the next steps for a firm so linked to the past you can see it beneath your feet.

ALINA SELYUKH, BYLINE: If you walk around your city or town and keep your eye to the ground, you'll start noticing round, metal lids embedded in the street. That means underneath is an important utility. It's usually marked water or sewer. But some, like this one in Washington, carry the relic logo of a bell.

These mark the backbone of America's telecommunications. And much of it belongs to Verizon. It's the country's largest phone company. At least that's how you may think of Verizon, a child of a 20th-century phone monopoly. But here's what else belongs to Verizon.

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UNIDENTIFIED HOST #1: Hello, and welcome to TechCrunch.

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UNIDENTIFIED HOST #2: Now with HuffPost live, you're invited to...

SELYUKH: TechCrunch, Engadget, Huffington Post - and then there's this.

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UNIDENTIFIED ANNOUNCER: From executive producers Ben Affleck and Matt Damon...

SELYUKH: It's a reality show, "The Runner" on Verizon's mobile video app, go90. Verizon has been slowly sprawling into digital media. It bought several video streaming companies, AOL - now Yahoo. It's also a co-owner of Complex Media, which started as a skater and sneaker culture outfit and is now big on hip-hop coverage.

It has a stake in Seriously.TV, which is a politics and comedy kind of site, in RatedRed, which has a youth-in-the-heartland demographic, and in AwesomenessTV, which makes series like "Royal Crush" and other videos for young women.

(SOUNDBITE OF YOUTUBE VIDEO, "20 WAYS TO DEAL WITH YOUR BOOBS")

ALYX WEISS: This is 20 ways to deal with your boobs.

ALEXIS G. ZALL: These guys right here.

SELYUKH: All this is Verizon's effort to become a top global media company, as CEO Lowell McAdam recently told investors.

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LOWELL MCADAM: We see tremendous opportunity in the digital video marketplace, which has an estimated addressable market of $180 billion by 2020.

SELYUKH: And the reason for this expansion is actually pretty pragmatic.

CRAIG MOFFETT: Wireless in the United States is now a shrinking business.

SELYUKH: Craig Moffett is an analyst at MoffettNathanson.

MOFFETT: Verizon is, I think, rightly recognizing that trying to constantly extract more from the consumer for their service is pushing on a string.

SELYUKH: For years, Verizon and other wireless carriers had a growing stream of income as they charged more for our increasing use of data. But now that just about everyone has a smartphone, we keep using more data, but its price is falling. Moffett says bills are going down - not up. In July, for the first time in six years, Verizon reported a decline in revenue. So the company needs more sources of income.

MOFFETT: If you're going to get more revenue per user, it's not going to come from the user him or herself. It's going to have to come from someone else. Well, who is that someone else? That someone else is almost certainly going to have to be advertisers.

SELYUKH: Verizon's $5 billion bargain purchase of Yahoo will instantly make it the third-largest player in digital advertising. But the wireless carrier is breaking into a market completely dominated by Facebook and Google. And they're in a different league. They have bigger piles of cash, less regulation and don't deal that much with physical things like maintenance of cables or leases on cell towers.

MOFFETT: Fundamentally, Verizon is not a Silicon Valley startup. And you can't pretend that it is.

SELYUKH: Verizon of 2016 is not your father's phone company. But its DNA still runs through the wires beneath those metal lids. Alina Selyukh, NPR News, Washington.

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