After buying AOL and Yahoo for nearly $9 billion, Verizon said Tuesday that it will write down the goodwill value of its media business by $4.6 billion, a massive drop that the company attributes to stiff competition in the digital ad market and a failure to realize benefits from the combination of the two legacy companies.

After Verizon acquired Yahoo last year, the company unveiled Oath, a media and tech business under which Yahoo and AOL would be housed, among other brands, to challenge Silicon Valley’s dominant position in online advertising. But according to a Securities and Exchange Commission filing, Verizon said the value of Oath’s goodwill – the intangible assets it purchased in the AOL and Yahoo acquisitions – has plummeted. Verizon had valued Oath’s goodwill at $4.8 billion, the filing said, but after the write-down it sits at just $200 million.

“Verizon’s Media business, branded Oath, has experienced increased competitive and market pressures throughout 2018 that have resulted in lower-than-expected revenues and earnings,” Verizon said, adding that the merger of AOL and Yahoo didn’t turn out as expected.

Verizon’s write-down disclosure comes just days after it announced that 10,400 employees have taken voluntary buyouts to leave the company, as it focuses on the development of its 5G services. The departing employees amounted to nearly 7 percent of Verizon’s staff.

Comments are no longer available on this story