AT&T ditches Synacor as portal provider

Synacor reveals that it's winding down three-year deal with AT&T to run the telco's web portal, which will sap nearly half of its overall revenue.

Alan Breznick, Cable/Video Practice Leader, Light Reading

July 12, 2019

2 Min Read
AT&T ditches Synacor as portal provider

Like the Lord, AT&T giveth and AT&T taketh away.

Three years after signing a major web portal services contract with Synacor Inc, AT&T is now dropping the company in favor of another, undisclosed vendor, potentially creating a big revenue shortfall for Synacor.

Synacor announced late Thursday that it "plans to begin discussions with AT&T regarding a wind-down and user-migration plan" for the portal. The announcement came after AT&T notified Synacor that it intends to select another portal provider for the site. accounted for $9.3 million in revenue, or nearly half of the $20.7 million in revenue generated by the Buffalo, N.Y. tech company's portal and advertising segment during the first quarter. Overall, Synacor generated about $102 million in revenue last year, including $53.3 million from portal and advertising contracts like the one with AT&T.

Despite this significant loss, Synacor officials expressed optimism that the company will not suffer greatly. In fact, pointing out that the wind-down and migration plan will take many months to execute and will be subject to mutual agreement between AT&T and Synacor, they maintained their financial guidance for both the second quarter and the full year. In May, the company said it expected to produce $31 million to $33 million in Q2 revenue and $137 million to $145 million in revenue for all of 2019, with net losses in both periods.

"Synacor is a $100 million-plus revenue business without the AT&T portal, and we have never been more excited about the significant opportunities in our $49 million high-margin, recurring-revenue-driven enterprise software business," Synacor CEO Himesh Bhise said in a prepared statement. "While we were optimistic regarding the strength of our renewal proposals as well as our accomplishments for, we have been actively managing the Synacor business to prepare for any outcome and have remained focused on our high-growth products and services."

Synacor made the announcement yesterday after the closure of Nasdaq. After sliding 11% in after-hours trading last night, the company's stock edged climbed back up to 1.53 in early-morning trading today.

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— Alan Breznick, Cable/Video Practice Leader, Light Reading

About the Author(s)

Alan Breznick

Cable/Video Practice Leader, Light Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

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