AT&T explores sale of its digital advertising business Xandr

AT&T Inc., increasingly focused on its entertainment ambitions and a continuing effort to cut debt, is exploring selling its Xandr digital advertising unit, the Wall Street Journal reported Tuesday.

The potential sale is a sign that AT&T is backing away from its desire to challenge Google parent Alphabet Inc. as a major player in online ads, the Journal said, citing unidentified people familiar with the matter. Dallas-based AT&T bought ad-marketplace operator AppNexus for about $1.6 billion in 2018 and used it as the basis of the unit now known as Xandr.

Discussions are at an early stage and might not result in a sale, which is unlikely to fetch more than the amount AT&T paid for AppNexus, the Journal said. An AT&T spokesman declined to comment.

Under former Chief Executive Officer Randall Stephenson, AT&T transformed itself from a staid telecommunications giant into a media conglomerate. It spent billions of dollars buying DirecTV and Time Warner, running up a hefty debt burden in the process.

AT&T may be looking at private equity buyers for part of DirecTV.

Now its new CEO, John Stankey, is looking for ways to slim down. That includes potentially selling media businesses, such as its Crunchyroll animation unit, and DirecTV.

Xandr was meant to appeal to marketers by exploiting AT&T’s own TV ad space, on channels such as TNT and CNN, as well as data about its wireless subscribers, the Journal said. But the unit didn’t generate robust revenue growth and struggled with technical problems.

AT&T this year folded Xandr into WarnerMedia, the former Time Warner assets, leading to the departure of Xandr chief Brian Lesser.

AT&T's five block Discovery District includes open spaces, restaurants and retail.

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