5 Companies That Had A Rough Week

The Week Ending Dec. 14

Topping this week's roundup of those having a rough week is Verizon, which is taking a $4.6 billion write-off for its struggling Oath media business unit.

Also making the list this week are IBM for losing a protest against the military's upcoming JEDI contract, Palo Alto Networks for its stockholders' rejection of a compensation plan for its top executives, Apple for a China court ruling banning the sale of some iPhone models, and Google for a security breach in its soon-to-be-closed Google+ service.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves—or just had good luck—check out this week's 5 Companies That Came To Win roundup.

Verizon Takes $4.6 Billion Charge For Diminished Value Of Its Oath Media Unit

Verizon’s Oath media subsidiary, the combination of the telecommunications company’s Yahoo and AOL acquisitions, isn’t working out as planned.

This week Verizon, which has valued Oath as a $4.8 billion asset on its books, revealed in a regulatory filing that it will take a $4.6 billion goodwill impairment charge to better represent the current market value of the struggling business unit.

Verizon said that Oath “experienced increased competitive and market pressures throughout 2018 that have resulted in lower-than-expected revenues and earnings.” Verizon said those pressures are expected to continue “and have resulted in a loss of market positioning to our competitors in the digital advertising business.”

Verizon also said that 10,400 of its employees have accepted early retirement buyouts under a voluntary separation program, part of the company’s effort to cut its annual costs by about $10 billion.

IBM's Protest Against The JEDI Cloud Contract Rejected By GAO

IBM’s protest of the military’s pending JEDI cloud computing contract has been rejected by the federal government watchdog agency that oversees procurement.

In a decision handed down this week, the General Accounting Office rejected IBM’s opposition to the Pentagon’s plan to award the cloud services contract, potentially worth up to $10 billion, to a single company.

The GAO rejected a similar protest from Oracle in November. Earlier this week Oracle filed a lawsuit in the case in the U.S. Court of Federal Appeals and the GAO, noting that IBM’s arguments are similar to those in Oracle’s lawsuit, rejected IBM’s protest, saying the matter is now “before a court of competent jurisdiction.”

Palo Alto Networks Shareholders Oppose Executive Compensation For 2018

Palo Alto Networks executives found themselves in a very uncomfortable position this week after stockholders overwhelmingly objected to the compensation given to the company’s five top executives in fiscal 2018.

The executive compensation plan included more than $125 million of total compensation for incoming CEO Nikesh Arora, who was Palo Alto Networks’ CEO for only 39 business days in the company’s fiscal 2018, which ended July 31.

At the company’s annual stockholder meeting on Dec. 7, 63.7 percent of shareholders opposed the compensation plan with only 17.1 percent voted in favor of it. (The rest were either broker non-votes or abstentions.) The results of the vote, which are non-binding, were announced Tuesday.

Arora’s compensation included more than $65 million of option awards and $59 million of stock awards.

Apple Hit With China Court Ruling Banning Sales Of Older iPhones

A long-running patent dispute between Apple and chipmaker Qualcomm took a twist this week when the Fuzhou Intermediate People's Court in China issued a preliminary order banning the sale in China of iPhone models from the iPhone 6S up through the iPhone X.

The ban stems from an earlier finding in the court that Apple violated two Qualcomm software patents related to photo resizing and application management on a touch screen.

Apple, however, maintained that the older model iPhones could still be sold in China with new software that provides a work-around to the patent ruling.

Google Discloses Social Network Glitch That Impacted 52 Million Users

Google admitted this week that a security bug in its soon-to-be-closed Google+ social network could have allowed third-party applications and developers to access personal information for 52.5 million users, the Washington Post reported.

For six days in November an update to the Google+ underlying code and its APIs allowed applications to access users' profile information including names, email addresses, occupations and ages—even if the profile data was set to "not public," Google admitted in a blog post.

"No third party compromised our systems, and we have no evidence that the app developers that inadvertently had this access for six days were aware of it or misused it in any way," Google wrote.

Google announced in October that it plans to close down the consumer version of Google+, which has fared poorly in competition with other social media such as Facebook. In the blog Google said that with the discovery of the bug, the company will shut down all Google+ APIs within the next 90 days and will now shutter Google+ itself in April 2019 instead of August 2019 as originally planned.