AT&T is exploring a sale of its advertising unit Xandr as the telecom major appears to reverse expensive plans to transform from a wireless carrier to a media and advertising powerhouse.
AT&T has spent more than $135 billion to stitch together a media company, satellite TV provider and advertising platform to grow its business.
AT&T CEO John Stankey is currently reviews the conglomerate’s assets in an attempt to reduce nearly $152 billion in net debt.
The talks on selling Xandr are in the early stages and may not necessarily result in a sale. The company intends to keep Crunchyroll, the popular anime streaming site, as it fits its content strategy, The Wall Street Journal reported.
“Selling Xandr really puts a nail in the coffin of this whole idea that there is money to be made for [telecom companies] in marketing,” said Tal Chalozin, chief technology officer and founder of ad tech firm Innovid.
AT&T rival Verizon Communications has also struggled to make money from its acquisitions spree that led to the formation of Verizon Media.
AT&T launched Xandr in 2018 after buying ad tech firm AppNexus for $1.6 billion to offer partners a better way to target ads at consumers using data collected from phone, internet and TV services.
A sale of Xandr would be particularly difficult, given its large size and growing regulatory concerns in the industry, said Ari Paparo, chief executive of ad tech firm Beeswax and a former executive at AppNexus.
“There’s a lot of doubt and skepticism over the digital ad space,” he said. “That puts a lot of question marks on the business.”
Xandr is continuing to work on new deals with other media owners to sell portions of their ad inventory through Xandr’s marketplace.
