Telstra writes off Ooyala investment

sofien72tu

Super VIP
Messages
25,214
Telstra writes off Ooyala investment

February 6, 2018 11.25 Europe/London By Julian Clover

Telstra has confirmed it plans to take a A$273 million (€173m) impairment charge against its investment in the cloud-based TV and video platform Ooyala.

In a statement released to the Australian Stock Exchange, Telstra’s group executive for technology, innovation and strategy, Stephen Elop said the value of the investment would be written down to zero.

The telco had bought into Ooyala in two stages in 2012 and 2014, having described the streaming technology as being the “next YouTube”. Since then Ooyala has lost a third of its value and Telstra has already taken a A$246 million hit on its investment.

“This was a business that Telstra purchased when the market dynamics were very different. When we announced the initial impairment 18 months ago we indicated that we would be working closely with the team to turn around the performance. We believed Ooyala remained a young and exciting company with leading offerings in intelligent video which were continuing to evolve and scale,” Elop said. “While some of these initiatives have been successful, the market has continued to change.”

Of the three key parts of the Ooyala business it is Ad tech that is by far the poorest performer and Telstra plans to exit from that section of the business. However Elop indicated that there was a future in the OVP (video player) and Flex workflow management system.

A new Ooyala management team is said to be making positive progress through improved bookings, product quality and reduced customer churn. However the business has yet to achieve sufficient scale.
 
Top