Telstra writes off Ooyala subsidiary; announces exit of adtech business

ASX-listed telco writes off $273m after failing to turnaround the video adtech and platform provider

Telstra is writing off investment in fledging video adtech and platform player, Ooyala, and will exit the adtech side of the business after it failed to meet performance expectations.

In a statement to the ASX today, the telco said it would take a one-off impairment charge of $273 million and write down the value of the US-based business to zero after failing to turn around its performance over the past 18 months.

Telstra initially took a 5 per cent stake in Ooyala back in 2012, and gain 98 per cent ownership of the company in 2014 in a deal valued at US$270 million. Prior to that, Telstra had previously invested US$61 million over two years.

By 2016, Telstra had already impaired the business, announcing plans aimed at trying to turn Ooyala around in the face of changing market dynamics. Ooyala was founded in 2007 and had a customer base including Dell, News Corp, The Washington Post, ESPN and Univision.

Telstra group executive of technology, innovation and strategy, Stephen Elop, who is also the chairman of the Ooyala board, said the group had purchased the business at a time “when the market dynamics were very different”. Ooyala has three components to its business: An adtech offering, an OVP, or video player, and a workflow management system.

“We believed Ooyala remained a young and exciting company with leading offerings in intelligent video, which were continuing to evolve and scale,” he said. “While some of these initiatives have been successful, the market has continued to change.

“Adtech has not performed well and we will therefore seek ways to exit that part of the business. Importantly, we do see a future in other core parts of the Ooyala business – video player and the workflow management system.”

Elop claimed the new Ooyala management team was making progress around improving booking trends, product quality and reduced customer churn but admitted the company had yet to achieve sufficient scale.

“From here, we will sharpen Ooyala’s focus by exiting adtech and focusing on the underlying video platform and continuing to serve our customers,” he said. “We will increase emphasis on our differentiated Flex media logistics product and we will drive operational efficiencies and leverage our go-to-market partnerships with companies such as Microsoft.”

Elop also flagged Telstra had its eye on broader options strategically for Ooyala given the fragmented competitive environment.

During Telstra’s ownership of the business, Ooyala has made several acquisitions, including European adtech provider, Videoplaza, in October 2014, and logistics and workflow software vendor, Nativ, in 2015.

 

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu    

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

More Brand Posts

What are Chris Riddell's qualifications to talk about technology? What are the awards that Chris Riddell has won? I cannot seem to find ...

Tareq

Digital disruption isn’t disruption anymore: Why it’s time to refocus your business

Read more

Enterprisetalk

Mark

CMO's top 10 martech stories for the week - 9 June

Read more

Great e-commerce article!

Vadim Frost

CMO’s State of CX Leadership 2022 report finds the CX striving to align to business outcomes

Read more

Are you searching something related to Lottery and Lottery App then Agnito Technologies can be a help for you Agnito comes out as a true ...

jackson13

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Thorough testing and quality assurance are required for a bug-free Lottery Platform. I'm looking forward to dependability.

Ella Hall

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Blog Posts

Marketing prowess versus the enigma of the metaverse

Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.

Liz Miller

VP, Constellation Research

Why Excellent Leadership Begins with Vertical Growth

Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?

Michael Bunting

Author, leadership expert

More than money talks in sports sponsorship

As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.

Simone Waugh

Managing Director, Publicis Queensland

Sign in