Telecommunications company AT&T is reportedly considering selling its digital advertising arm Xandr as it looks to reduce its US$152 billion (AU$206 billion) debt.
According to the Wall St Journal, the telco is in early discussions to sell the advertising operations off but it may not necessarily result in a sale. It is also currently in discussions to sell its shrinking DirecTV satellite business to private equity firms.
Over the last couple of years, AT&T has been building out its digital advertising business in a bid to take on tech giant Google and its parent company Alphabet Inc.
The largest part of the operations, AppNexus, was acquired in 2018 for about US$1.6 billion and then consolidated under the umbrella brand Xandr.
The merged entity combined data, premium content, advanced advertising technology and AT&T’s distribution to more than 170 million direct-to-consumer relationships across wireless, video and broadband.
Videology co-founder and Lotame chief operating officer Mike Woosley says as new regulations come into play surrounding data and privacy, he believes Xandr's value outside of AT&T won't be promising.
“With the onslaught in new regulation around media and privacy, the business interests that run the wireless business inside AT&T don’t want to rent their data out to a peer division for 5% more revenue,” Woosley says.
“Xandr will be a tough sell outside of AT&T. Without continued access to AT&T’s data, or the Warner media trove, Xandr becomes just another digital advertising agency without command of any proprietary technology.
"Suddenly, the $1.6 billion that AT&T paid for AppNexus looks to be under substantial distress. The organization also lost it’s cult of personality in June, when Brian Lesser left AT&T, passed over for promotion.”
Xandr declined to comment.
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