Despite the sad ending for two companies that were once internet giants, the Los Angeles Times noted there could still be profitability in the future for Yahoo. Yahoo fell after Verizon Communications announced it would buy most of Yahoo’s internet businesses for $4.83 billion.
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A transaction stands to finally seal the fate of web pioneer Yahoo after months of speculation and pressure from investors including Starboard Value LP.
Parties as diverse as Warren Buffett and The Daily Mail were interested in buying Yahoo.
Verizon’s acquisition is of “core” Yahoo, which includes search, email, advertising products, and the media business (including Yahoo Finance).
Once finished, Yahoo will be a shell of its former self, existing mainly as a holding company for its Alibaba and Yahoo Japan investments, as well as its patent portfolio. They will be spun into a separate, yet-to-be-named, publicly traded company.
Most analysts expect the deal to end the four-year reign of Yahoo’s Mayer, who flopped in her much-watched attempt to turn around the company that was once a titan valued at $130 billion. Yahoo attempted to buy Google and Facebook in their formative years, but it was rebuffed and then later dwarfed by them. However, he said that Verizon has not yet decided what it wants to do in search, an area where Yahoo has waged a losing fight against Google for a decade.
The sale was announced on Monday US time and is expected to be completed in the first quarter of 2017.
Seeing the size of Mayer’s payout could be painful for investors who saw the company’s revenue stagnate during her tenure. Marissa Mayer, CEO of Yahoo, said in a statement.
“For me personally, I’m planning to stay”, she wrote. Armstrong, McGrath said, has done a good job of keeping AOL relevant and marrying content and advertising goals. However, it also masks the full value of Yahoo’s core business, since it was being discounted due to the risk of triggering a tax bill, Mogharabi says.
“Yahoo gives us scale and that’s what’s most critical here”. Armstrong will lead the integration, she added. On a conference call Monday, a few analysts asked about dividend possibilities or stock buybacks as other options.
Verizon has made a string of acquisitions in an apparent effort to move beyond a telecom provider into a media-and-mobile-advertising powerhouse that can compete with Google.
Mayer, like Armstrong, previously worked at Google before taking over the top spot at Yahoo in 2012.
Yahoo and Verizon both declined to comment.
But the sale price suggests that Yahoo’s glory days ended long ago. In 2008, for example, Microsoft was willing to pay more than $45 billion for Yahoo, an offer that was rebuffed by cofounder Jerry Yang.
Yahoo was synonymous with the Internet itself in the late ’90s.
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Instead, it’s more likely that Verizon would use location and other data it has about its users to help advertisers target people across the internet. Shares of Yahoo were down almost 4% Monday afternoon.
