$4.8 Billion Verizon Yahoo Purchase Shows Carrier Determined Not To Be a “Dumb Pipe”
On the long-debated question of whether or not it’s OK for communications service providers to operate as “dumb pipes,” Verizon clearly believes the answer is “no.”
Verizon sees great value in the ability of its wireless network to gain knowledge about customers, including location-based information, and to use that information to customize advertising and content offerings, with customer consent. In the last two years or so the company has made a range of moves to support this strategy. Some industry observers see substantial challenges for Verizon as it pursues a mobile strategy, however. And Verizon’s mobile content strategy has drawn criticism from those who believe the company’s investment in company’s such as AOL and Yahoo detracts from its ability to invest in its network infrastructure, particularly on the landline side of its business. Those critics tend to believe that it’s fine for service providers to pursue a dumb pipe strategy – as long as they deliver the highest quality and highest capacity pipes possible. It could be years before we know whether Verizon has made the right choices on the dumb-versus- smart-pipe question.