(Reuters) - Telstra Corp said on Friday it would write down to zero the value of its U.S. video platform Ooyala, which had symbolized the Australian company’s efforts to diversify from its ageing domestic copper-line telecoms business.
Almost four years after it bought the firm for $330 million, Telstra said in a statement it would take a A$273 million ($219 million) non-cash charge to its half-year financial results as a consequence of the write-down.
“Telstra identified challenges in the business and changing market dynamics 18 months ago and impaired the business at the time of its 2016 results,” Telstra added.
It said it would look to exit one of the three key parts of Ooyala’s business, ad tech, but still saw a future for the firm’s video player and workflow management system units.
Ooyala was once the biggest single investment by Telstra’s venture-capital arm, which was conceived to help the company break out of its main business in Australia at a time of rapid technological change.
Telstra has tried its hands at a range of business in the technology and media sphere, ranging from music streaming services to restaurant booking applications.
Telstra is expected to report its half-year earnings on Feb. 15.
Reporting by Rushil Dutta in Bengaluru; Editing by Richard Pullin and Stephen Coates