Market insight: Verizon acquires Yahoo – what does this mean for your ISP?

By Stuart Paton, Sales Director UK, Ireland and Nordics, Open-Xchange

verizon_yahooLast week, after a process lasting many months, Verizon announced it is acquiring Yahoo. The dominant Internet portal only a decade ago, in more recent years Yahoo’s position has waned with the much publicised attrition of its user-base by Google. Having lost its crown to Google, and Facebook, much of the revenue marketers spent on advertising with Yahoo has also gone with it as they increasingly favour platforms with higher user figures.

Following the acquisition, speculation in the market is rife that Verizon will likely merge Yahoo with AOL – acquired mid-2015. Rumour in the industry is that Verizon hopes such a move will encourage the redirection of advertising spend towards its offering away from Google and Facebook.

Why is this a big deal for UK ISPs?

With two of the largest ISPs in the UK, BT and Sky, using Yahoo to provide email services to their customers it calls into question what the exact future plans are for these hosted email solutions. For example, will Verizon choose to retain the millions of active webmail users that visit from BT and Sky to use their webmail? It stands to reason that, as these visits are what make Verizon money via advertising, in all likelihood it will.

But looking across to the other side of the Atlantic we can see some challenges may emerge. A number of US ISPs and mobile carriers also use Yahoo for their consumer email, and, interestingly, a few of them are actually direct competitors with Verizon. The recent acquisition now poses them significant challenges as to the future direction of their offering. One thing for certain will be on the mind of Verizon, if all the ISPs using Yahoo decide to leave as a result of the acquisition, is it even viable for Verizon to maintain its hosted ISP email offerings at all? Potentially not.

So with pressure building in the US, will end-users of Sky or BT’s email services also see a change? For now, in the immediate future, it’s unlikely. Contracts for such services usually last for multiple years and the process for changing a hosted email supplier is no trivial project. Often a transition takes many months of effort to achieve in a near transparent way to the end user. However, looking ahead to the long-term I am sure alternative options to Verizon are being considered now by many ISPs worldwide.

Value-add is the name of the game

Simply put, the deciding factor for any end-user when it comes to choosing their ISP is whether the provider can put forward a compelling offering. Highly relevant, high value-add services are the name of the game. At Open-Xchange, our mission is to enable service providers to add the value which stands out from the crowd. We champion an open, trusted internet for all and our solutions enable ISPs to build these values into their core offering.

According to the Open-Xchange Consumer Openness Index 2016, 72 percent of the UK public believe everyone has a fundamental right to privacy. During an age when the likes of Google and Facebook have unprecedented access to our data its vital end-users are made aware of the implications of this and feel empowered to choose a provider which places the notion of keeping their data private at its heart.

In a world where Internet companies are increasingly carving out their own monopolies on data and little fiefdoms, operating by their own rules, it’s paramount consumers are well-informed of the consequences and have the choice to choose differently. It’ll be interesting to see just how the ISP market reacts in the coming months to the acquisition, but it could well be just the tipping point this movement needs.