Telstra Loses $273m Over Ooyala, Writes Value Down To Zero
Telstra will be losing $273m over the investment of video streaming service Ooyala and will be writing down the value of the US based company to Zero.
It says it will be making a non-cash impairment and recognises an impairment charge of $273m against goodwill and other non-current assets in its results for that period and to write the value down to zero.
In 2012, Telstra acquired 9 per cent of the company and increased its holding to 98 per cent in 2014.
Telstra has spent $500m as part of its strategy for the past six years.
The acquisition was seen as a move by Telstra to take on the likes of YouTube.
Telstra saw the challenges in the business and changing market dynamics 18 months ago and impaired the business at the time of its 2016 results.
Stephen Elop, executive technology, innovation and strategy at Telstra says, “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 believe Ooyala remained a young and exciting company with leading offerings in intelligent vieo which were continuing to evolve and scale.”
Elop says he sees a future in other parts of the business such as the video player and workflow management system.