“I love Yahoo, and I want to see it into its next chapter”.
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YAHOO: Shares in Yahoo, the original Internet giant, fell $1.06, or 2.7 percent, to $38.32 after the company announced Verizon would buy its advertising, media and email businesses for $4.8 billion.
Armstrong said the acquisition strengthens Verizon’s offerings to advertisers and consumers and gives it much more scale, since Yahoo claims 1 billion users who visit at least once a month.
Verizon said the takeover still needs the approval of Yahoo’s shareholders and the green light from regulators.
The deal will, however, turn over the popular Yahoo News, Mail and other online services used by more than a billion people worldwide.
Though many analysts blame Mayer’s missteps for hastening Yahoo’s decline, she still stands to make a fortune in the form of a golden parachute payment of roughly $54.9 million, USA Today reported.
Yahoo, founded in 1994, was a dominant player in the early days of the internet, but has long lost its leadership position in internet search and advertising to Alphabet Inc’s Google, Facebook Inc and others.
CEO Marissa Mayer announced that she intends to stay back at the company once the deal is closed. Marni Walden, head of product innovation and new business at Verizon, will head the combined internet unit and said no decisions had yet been made on the management team.
Mayer, in an interview with Reuters, said she still saw a “path to growth” for Yahoo, especially in mobile. But she and Tim Armstrong, chief executive of AOL, said it had not yet been decided if she would have a role at the company after the deal closed in early 2017.
Mayer has previously rejected comparisons between Yahoo and AOL and rebuffed an acquisition offer from Armstrong. If she received that payout, her total compensation from Yahoo for her service so far would be about $218 million, according to the compensation research firm Equilar.
The integration of Yahoo will not come without challenges.
After the sale Yahoo will be left with cash, investments in Alibaba and Yahoo Japan, and some patents. The deal will put Verizon in third place in the US digital ad market share, behind Facebook and Google.
BONDS, CURRENCIES: U.S. government bond prices rose.
Yahoo had at one point past year considered spinning off its 15.4 percent stake in Alibaba Holding Group, through a company called Aabaco Holdings, but hesitated on the move because of uncertainties about potential tax implications. They are worth about $40 billion based on their market capitalizations, while Yahoo had a market value of about $37.4 billion at Friday’s close.
Yahoo chief Marissa Mayer said the company, that changed the world, will continue to do so through this combination with Verizon and AOL.
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Under pressure from Starboard, Yahoo launched an auction of its core business in February after shelving plans to spin off its stake in Alibaba.
