The telecom giant had hoped to use its scale and AppNexus deal to build up a Digital ad business
AT&T Inc. T -0.57% is exploring the potential sale of its digital ad operations, a sign the telecommunications company is curbing its ambitions to become a force on Madison Avenue, according to people familiar with the matter.
AT&T acquired the biggest component of those operations, AppNexus, for about $1.6 billion in 2018 under a plan to challenge heavyweights such as Google owner Alphabet Inc. for a piece of the multibillion-dollar digital ad marketplace. Executives planned to expand the business into a leading exchange for TV ads as the medium moved to online streaming services.
Discussions are at an early stage and may not ultimately result in a sale, which is unlikely to fetch more than the amount AT&T paid for AppNexus in 2018, the people said. An AT&T spokesman declined to comment.
After bulking up with large acquisitions, the media-and-telecom conglomerate is exploring alternatives for several of its assets to bolster its debt-laden balance sheet, some of the people said. The Wall Street Journal reported Friday that AT&T is discussing selling most of its shrinking DirecTV satellite business with private-equity firms.
AppNexus operates one of the largest online ad exchanges, automated marketplaces that allow advertisers to buy space across thousands of websites, targeting their desired audiences. AT&T executives hoped to appeal to marketers by combining the unit with TV ad space on channels such as TNT and CNN as well as its data about wireless subscribers.
The Dallas company put a high priority on the ad operations, which the company carved out into a separate division called Xandr in honor of the original AT&T’s progenitor, Alexander Graham Bell. But the unit failed to yield the explosive revenue growth its owners hoped to generate and often struggled with technical problems familiar to tech companies that invest billions of dollars a year in their ad exchange technology.
Xandr generated about…
