On Monday, Verizon announced it acquired Yahoo in a US$4.8-billion (A$6.41-billion) deal that would likely signal Mayer’s permanent exit from the tech company that once defined the internet.
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Way back in 2008, Yahoo turned down Microsoft’s $45 billion offer saying that the deal undervalued the company and now Yahoo has agreed to sell its core Internet business to Verizon for a $4.83 billion cash deal.
The deal, expected to close in early 2017, marks the end of Yahoo as an operating company, leaving it with a 15pc stake in Chinese e-commerce company Alibaba Group and a 35.5pc interest in Yahoo Japan.
Yahoo will be rolled into Verizon’s AOL operations and CEO Marissa Meyers could be working again with AOL CEO Tim Armstrong, who worked with Mayer at Google for years and tried unsuccessfully to convince her to combine the two companies when they both remained independent.
Yahoo has come under pressure from shareholders angry with a downturn in its performance over the past eight years as it lost out to the likes of Google and Facebook. What’s more, Yahoo tripled its mobile base to more than 600 million monthly active users over the same span of time and just previous year, generated more than $1 billion in mobile advertising revenue.
Mayer arrived in 2012 seeking to revitalize Yahoo, which at its peak had a market value of over $100 billion. “Ad dollars are going to Google and Facebook and they’re coming out of everyone else”.
“It’s poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile”, Mayer said in a statement.
She invested heavily in improving Yahoo’s mobile products, expanding its audience through the acquisition of Tumblr and doubling down on premium media content. She brought in TV journalist Katie Couric as Yahoo’s “global anchor”.
Verizon’s purchase of Yahoo will also build on its 2015 acquisition of AOL, which added such digital properties as The Huffington Post, TechCrunch and Engadget as well as AOL.com.
Started in 1994 by Stanford graduate students Jerry Yang and David Filo, Yahoo in its early years was the destination of choice for many making their first forays onto the World Wide Web.
Shar VanBoskirk of Forrester Research said Yahoo fills a key need by providing data on customers that can help contextual advertising. Starboard pushes for entire Yahoo board, including Ms Mayer, to be removed.
Yahoo says it has more than 1 billion users, though Outsell analyst Randy Giusto believes only about 200 million are habitual visitors. It bought a 40 percent stake in Alibaba in 2005 for $1 billion and its current holding is now worth some $30 billion – the vast majority of Yahoo’s market value of around $37 billion.
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But Verizon appeared to be the leading candidate because of its ability to integrate AOL’s advertising technology into Yahoo services.
