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Verizon (NYSE:VZ) it was learned today will be purchasing all of the software, technology and certain “other assets” from the virtual and augmented reality company Jaunt for an undisclosed sum. Verizon has scaled back from recent investments in its media business and laid off about 7% of its media workforce. The company looks to be making strategic investments in select markets that would augment its current portfolio. Jaunt is focused on creating scaled augmented reality (AR) content since so far virtual reality has not taken off outside of niche areas. AR looks to be a much more promising and profitable venture since the technology will be able to be deployed to existing hardware such as smartphones and other camera-carrying devices. “We are thrilled with Verizon’s acquisition of Jaunt’s technology,” said Mitzi Reaugh, President & CEO of Jaunt XR. “The Jaunt team has built leading-edge software and we are excited for its next chapter with Verizon.”
AR for those unfamiliar is the blending of the real world and virtual one with computer-generated perceptual information is sent to the user, either through any sensory means. It could be visual, audio or even haptic feedback to the user. Likely one of the areas that Verizon will be looking into with this purchase is building more immersive advertising while building out its 5G network. Having the ability to know where a user is, what they may be seeing, and what restaurants or stores are around might allow them to engage in more prospective advertising. In addition, the Verizon Media arm might be looking to engage in more immersive entertainment considering the previous launch of the RYOT Innovation Studio. We’ll need to wait and see what information becomes available as we close in on the company’s earnings report due out in October.
There is a lot of competition between the major communications companies with AT&T (NYSE:T) having completed its large media purchase, T-Mobile (NASDAQ:TMUS) and Sprint (NYSE:S) attempting to complete their merger and the race to deploy the new 5G networks. Unlike the latter companies, Verizon has taken a much quieter approach to competition and focused much more on its core communications business rather than engaging in massive acquisitions and mergers. While the company last year did need to take a $4.6 billion write-down on the media sector of its business, it is very well poised in comparison to the other major networks and we can expect this latest acquisition will add to the ability of the firm to continue to build up its media portfolio. This will be especially true going forward since AR is a much less crowded space with big tech firms focused on VR content instead.