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
cmo-xs-promo

Latest Videos

More Videos

Anyone can become a victim of the sophisticated schemes set up by these scam websites. It's not about being smart; I don't consider mysel...

Mathieu Lecompte

ACCC takes Meta to court over scam cryptocurrency advertising

Read more

Nice blog!Blog is really informative , valuable.keep updating us with such amazing blogs.influencer agency in Melbourne

Rajat Kumar

Why flipping Status Quo Bias is the key to B2B marketing success

Read more

good this information are very helpful for millions of peoples customer loyalty Consultant is an important part of every business.

Tom Devid

Report: 4 ways to generate customer loyalty

Read more

Great post, thanks for sharing such a informative content.

CodeWare Limited

APAC software company brings on first VP of growth

Read more

This article highlights Gartner’s latest digital experience platforms report and how they are influencing content operations ecosystems. ...

vikram Roy

Gartner 2022 Digital Experience Platforms reveals leading vendor players

Read more

Blog Posts

​Why we need to look at the whole brand puzzle, not just play with the pieces

Creating meaningful brands should be a holistic and considered process. However, all too frequently it’s one that is disparate and reactive, where one objective is prioritized at the expense of all others. So, what are the key pieces to the ‘good’ brand puzzle?

Marketing overseas? 4 ways to make your message stick

Companies encounter a variety of challenges when it comes to marketing overseas. Marketing departments often don’t know much about the business and cultural context of the international audiences they are trying to reach. Sometimes they are also unsure about what kind of marketing they should be doing.

Cynthia Dearin

Author, business strategist, advisor

From unconscious to reflective: What level of data user are you?

Using data is a hot topic right now. Leaders are realising data can no longer just be the responsibility of dedicated analysts or staff with ‘data’ in their title or role description.

Dr Selena Fisk

Data expert, author

Sign in