On Friday, reports said that the Oath CEO could depart the company as soon as next month. Armstrong, the former head of U.S. sales at Google, ran AOL for six years before selling it to Verizon in 2015 and helping acquire Yahoo last year to form Oath. But Armstrong appears to have been thwarted in his desire to spin off Oath into a separate company and is now on the way out the door, according to the Wall Street Journal and other outlets.
The rumors led to questions about Verizon’s dedication to stick with the digital ad push. After all, new CEO Hans Vestberg, who took over from Lowell McAdam in August, has a long career in the telecommunications equipment sector and little experience with media or advertising. And Verizon this year shut down its Go90 video service and sold off its stake in video producer AwesomenessTV.
It was left to Verizon (VZ) CFO Matt Ellis to try to clear up the confusion on Friday. Speaking at a Bank of America investor conference, Ellis was asked point blank about Verizon’s continued interest in building the Oath unit.
“Our commitment is as strong today to Oath as it has ever been,” Ellis proclaimed. “There’s a lot of good work going on there. It’s really setting the foundation of what we expect to do with the business going forward and we still feel very strongly there’s a great opportunity there.”
Ellis declined to comment on the Armstrong rumors, however. Verizon also declined to comment when asked by Fortune.
Investors mostly ignored the reports. Shares of Verizon lost less than 1% on Friday and have gained 6% so far in 2018, trailing 8% increase in the Standard & Poor’s 500 Index.
Oath has brought in total revenue of $8 billion over the past year and former Verizon CEO McAdam had pledged sales would grow to $10 billion by 2020. Ellis reaffirmed that Oath was still on track. “It’s still on the table,” he said curtly in response to an analyst’s question. Even if Oath reaches the goal, it will remain a small fraction of Verizon’s expected overall annual revenue of about $140 billion.
That’s a pretty modest goal, giving the boom in digital ad spending. Market research firm eMarketer projects total spending on digital ads will rise to $357 billion in 2020 from $273 billion this year. Verizon needs to capture only $2 billion of the expected $84 billion increase. But it’s Amazon (AMZN) that will become the strongest challenger to Facebook (FB) and Google (GOOGL), surpassing Oath’s share of the market by 2020, eMarketer forecast.
Vestberg has yet to put his stamp on the company, which passed on the major acquisitions pursued in recent years by rivals AT&T (T), T-Mobile (TMUS), and Sprint (S).