With its core wireless business maturing, Verizon is expected to keep Yahoo mostly intact to compete with Alphabet Inc’s Google and Facebook Inc in digital ads by tapping into users on sites like Yahoo Finance. The company spent more than $US3 billion buying or investing in more than 51 companies ranging from Flurry, an advertising platform for mobile applications to Tomfoolery, a smartphone applications developer. Last year, Verizon bought AOL for $4.4 billion. The two brands will be rolled into the same operation.
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Technology analyst Jack Gold of J. Gold Associates said the deal makes sense with telecom companies such as Verizon and AT&T seeking to move beyond their role as carriers. The company already profits from the data plans that connect more than 100 million people and their devices to the internet. In her message to employees, Mayer added that she plans to stay with the organization for now. 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. “When I was growing up, I wanted to be either a cowboy or a ballet dancer”. “For me personally, I’m planning to stay”.
The slump has been deepening even though advertisers have been pouring more money into what is now a $160 billion market for digital advertising, according to research firm eMarketer.
She told a conference call that Verizon “offers significant strategic alignments in Yahoo’s focus on informing, connecting and entertaining our users”.
True, Armstrong and Mayer worked together for a decade at Google, and the two have always been cordial, despite Mayer spurning Armstrong’s proposal of a Yahoo-AOL merger in 2014.
Technology companies will dominate quarterly earnings news this week, including results from Apple, Amazon, Google and Facebook.
Yahoo under AOL could actually look much the same as it does now, McGrath said. “But better late than never”. Yahoo will be left with its stakes in Alibaba Group Holding and Yahoo Japan, with a combined market value of about US$40 billion.
The deal still needs to be approved by shareholders and regulators but Mayer stands to gain more than $50 million in severance if she is ousted.
Verizon chairman and chief executive Lowell McAdam said: “Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers”.
One of the most important companies of the first dot-com boom, Yahoo, has reached the end of the road as an independent entity.
Meanwhile, Yahoo shares tumbled after Verizon announced it would buy the company’s web properties for $4.8 billion. Yahoo will also retain its cash, convertible notes, certain minority investments, and a noncore portfolio of patents called Excalibur. Mayer has already jettisoned 1,900 Yahoo workers since last September. Facebook and Google are forecast to deliver sales of $10.3 billion and $24.63 billion, respectively, by the end of this year. “I am incredibly proud of all that”.
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Yahoo shares closed 1.4 per cent higher on Friday at $US39.38.
