USA telecom giant Verizon Communications Inc said Monday it would buying Yahoo for $4.83 billion, marking the end of an era for a company that once defined the Internet.The purchase of Yahoo’s operations will boost Verizon’s AOL internet business, which it bought previous year for $4.4 billion, and give it access to Yahoo’s ad technology tools, BrightRoll and Flurry, and assets such as search, mail, and messenger.
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After months of speculation, the deal is done: Verizon will acquire Yahoo for $4.83 billion.
Yahoo executives said the remaining company is structured to “indefinitely” hold its Yahoo Japan and Alibaba shares.
Yahoo will operate independently until the acquisition and then fall under the aegis of AOL unit chief, Tim Armstrong, a former Google colleague of Mayer.
The Verizon deal must be approved by regulators and is expected to be finalized early next year.
While many tech companies like web browser maker Netscape, never made it to the end of the first dot-com boom, Yahoo managed to grow from being a directory of websites to offering searches, email, shopping and news.
It also ends a turnaround effort by Marissa Mayer, who joined Yahoo four years ago and promised to revitalize the company. “It’s important to me to see Yahoo into its next chapter”, she wrote in a blogpost.
Most of the money has been flowing to internet search leader Google and internet social networking leader Facebook, two companies that eclipsed Yahoo during its slide from an online sensation, once valued at $130 billion, to a dysfunctional also ran.
In a Tumblr blog post, Mayer said she planned to stay at Yahoo, but Verizon’s Marni Walden, who will head the combined company, told CNBC the new leadership team has yet to be determined.
Yahoo was synonymous with the Internet itself in the late ’90s. It’s unclear whether Verizon will make much use of Yahoo’s search, messaging and mail tools – although it’s safe to imagine it will roll these out as defaults for its U.S. customers.
By bringing AOL and Yahoo together, Verizon is betting that it will be able to draw upon the best of both services to create more compelling apps and attract more advertisers. It has invested in digital content and advertising in recent years, buying AOL and the Huffington Post.
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The addition of Yahoo to Verizon and AOL will create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities, the three companies said in a statement Monday.
