Verizon and Yahoo have not commented on who will lead Yahoo once the deal is complete.
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“With [Verizon’s] aggressive aims to grow global audience to 2 billion users and US$20 billion in revenue within the mobile-media business by 2020, Yahoo’s products and brand will be central to achieving these goals”, wrote Mayer. Shares of Yahoo were down almost 4% Monday afternoon.
The all cash deal, comes a year after Verizon bought AOL for USD$4.4bn, with Verizon now adding all of Yahoo’s consumer services such as its search, news, sport, finance as well as its social player Tumblr to an offering that includes AOL as well as sites like The Huffington Post.
“Yahoo has a lot of strength of assets”, says Roger Entner, an analyst at Recon Analytics in Dedham, Mass. “It just does an extremely poor job of monetizing them”.
Now, the deal is being greeted more with shrugged shoulders than loud applause.
Mayer told CNBC she is proud of her accomplishments at Yahoo, even though the company’s annual revenue, after ad commissions, fell from $4.4 billion before her arrival to a projected $3.5 billion this year.
In June, Barclays said Verizon could save up to US$500 million a year in costs by buying Yahoo’s Internet business, as it would no longer have to shell out for traffic and other expenses.
It also holds a multibillion-dollar stake in Yahoo Japan.
Yahoo Japan would have to create a subsidiary, contribute cash and an operating business that has been active for five years, according to Willens.
“It’s incredible watching the landscape of media and technology companies converge in the way they have in the past decade, ” Moore said.
It’s official: Yahoo’s days as an independent company are over. Yahoo board member Tom McInerney, who is chairman of its strategic review committee, said on a conference call with analysts that the company views the stakes in Yahoo Japan and Alibaba differently.
Most of that money, however, has been flowing toward Google and Facebook, two companies that eclipsed Yahoo during its slide from an online sensation, once valued at $130 billion, to a dysfunctional also ran. Ars said she seems likely to leave (especially with a $57 million severance waiting in the wings) although she said she loves Yahoo and “plan[s] to stay”. We’re the up-and-comer. We’re going to compete for the gold medal in the future. It still needs approval from Yahoo shareholders.
The sale to Verizon drew nostalgic responses from Wall Street investors, including RBC Capital, which characterized the deal as an “ignominious end for Yahoo, which used to be the Facebook or Google of the internet circa 1999”.
In December, Yahoo scrapped plans to spin off its Alibaba stake after investors fretted over whether that transaction could have been carried out on a tax-free basis.
Energy companies dropped more than the rest of the market as the price of oil took another turn lower.
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Yahoo will operate independently until the acquisition and then fall under the aegis of the AOL unit chief, Tim Armstrong, a former Google colleague of Mayer. Yahoo stock has risen 18.4 per cent so far this year.
