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

Conversations over a cuppa with CMO: Tyron Hayes

​The current global COVID-19 pandemic is resulting in unprecedented disruption to every aspect of our lives as marketing and brand professionals, from the ways we work, to how our organisations operate, and the way in which we acquire and engage customers. So we’ve drawn on our wonderful CMO50 alumni community to explore different aspects of the crisis facing all of us right now.

More Videos

Why these voice assistants are so popular nowadays? Maybe I should get one too? I am really curious.

Jill Kim

Aussie brands jump on voice-interaction bandwagon following Amazon Alexa's local launch

Read more

Your page is very helpful. Thank you for sharing with us

Eriona Ajvazi

10 brands making a positive difference to a world in crisis

Read more

Extremely insightful and well written. Thanks for the great article!

Nicole Brodie Nahum

Why COVID-19 makes it more important than ever to move at the speed of the consumer

Read more

Blockchain is one of the fastest growing technology in today's digital era. Industries like banking and finance are already using blockch...

Aniket Singh

Can blockchain deliver on its big advertising promises?

Read more

Great article Emma. So many gems in there. Awesome to have you in the team!

One Small Step Collective

Why COVID-19 makes it more important than ever to move at the speed of the consumer

Read more

Blog Posts

The gear change required for business during COVID-19

The current world pandemic, COVID-19, and its tragic effects has created different and challenging situations for nearly every business. Every business sector is affected differently, depending on the nature of what your place in the world, creating the most unique situation most of us have ever and will ever experience during our professional lives.

Katja Forbes

Managing director of Designit, Australia and New Zealand

How can organisations debias their decisions?

​People whose personal details and experiences signal they come from racially diverse backgrounds are less likely than anglo or Caucasian candidates to make it through the first cut in recruitment processes. Even if the organisation says it values diversity.

Dr Karen Morley

Author, commentator

Is your marketing team adapting quickly enough to the COVID-19 crisis?

The impact of coronavirus is far reaching with the true impact on the economy and businesses is unknown. While there are a few categories and brands experiencing growth, for the most part the crisis is wreaking havoc for large and small operators across many sectors including entertainment, tourism, retail, fitness, services and the list goes on.

Teresa Sperti

Founder, Arktic Fox

Sign in