In a note to employees on Monday, Yahoo Chief Executive Marissa Mayer said: “Today’s announcement not only brings us an important step toward separating Yahoo’s operating business from our Asian equity stakes, it also presents exciting opportunities to accelerate Yahoo’s transformation”. “We have enormous respect for what Yahoo has accomplished”. While many will see the acquisition as proof that Mayer failed at CEO, she’s quick to point out all of the accomplishments that have taken place at Yahoo since her arrival.
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Under pressure from activist investor Starboard Value LP, Yahoo launched an auction of its core business in February after shelving plans to spin off its stake in Alibaba.
For Verizon, the acquisition will help it gain Yahoo’s 1 billion monthly active users, its internet properties and key applications like search and email, and its advertising systems.
But most of that money has flowed to Google and Facebook, two companies that eclipsed Yahoo during its long slide from a sensation to a dysfunctional also-ran.
Bankers and analysts argue it is most likely that Yahoo will find a way to divest its Yahoo Japan stake, worth more than $8 billion on paper, before making any decision on the Alibaba stake, which is worth more than $30 billion.
The other two businesses Ms. Walden oversees are Verizon’s internet of things operation, which involves connecting objects in the real world to the internet, and telematics, which involves connecting cars to the wireless network. Mayer has already jettisoned 1,900 Yahoo workers since last September.
Plus, Mayer is in line to pocket $54.9 million if she leaves upon the change in control.
When millions of people began to flock to the internet with the advent of graphical web browsers in the 1990s, Yahoo was king. It didn’t recognize the importance of social networking and was slow to make the leap into mobile devices like smartphones and tablets.
“It could be good for them if they think differently about what it means to be Yahoo”.
After the sale Yahoo will be left with cash, investments in Alibaba and Yahoo Japan, and some patents. Yahoo and its sub-brands will not automatically slot into Verizon’s digital life portfolio, which comprises AOL and its sub-brands.
AOL CEO Armstrong told CNBC combining the power of Yahoo and AOL could give Verizon Communications the necessary tools and reach to become a major powerhouse in digital advertising.
Struggling internet search engine Yahoo is set to be taken over by United States telecommunications giant Verizon in a deal worth more than $6 billion. It would still be far behind in ad revenue, compared with Google’s projected $27 billion, and Facebook’s projected $10 billion.
It appears at first glance to be an ignominious fate for Yahoo, the internet pioneer which has always been one of the best-known names in Silicon Valley. Mobile revenue at $378 million lagged behind the company’s desktop revenue of $875 million in the second quarter.
On a conference call, she said the agreement is “an exceptional outcome for Yahoo shareholders” and that Verizon was chosen because it “believed in us the most”.
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But Roger Kay of Endpoint Technologies Associates said Verizon should keep its goals more modest and may get a small benefit from the Yahoo brand. These assets will continue to be held by Yahoo, which will change its name at closing and become a publicly traded investment company, the statement said.
