“The sale does not include Yahoo’s cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents”, said the release.
Advertisement
“We have enormous respect for what Yahoo has accomplished: This transaction is about unleashing Yahoo’s full potential”, AOL CEO Tim Armstrong said in a statement.
Yahoo will now be integrated with AOL under Marni Walden, EVP and president of the product innovation and new businesses organisation at Verizon.
Yahoo says it has more than 1 billion users, including 225 million on its email service.
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. She pointed to a 50 percent increase in Yahoo’s total worldwide audience to more than 1 billion users, including 600 million people who now visit on mobile device, three times more than before her arrival. The Asian assets account for most of Yahoo’s current market capitalization of $37 billion.
Verizon said it would provide more detail on the strategy behind the acquisition when it announces second-quarter earnings on Tuesday.
The takeover will double the size of Verizon’s digital advertising, placing it as a distant third behind Google and Facebook in the $187 billion market.
Verizon spokesman Bob Varettoni and Yahoo spokeswoman Rebecca Neufeld declined to comment.
Some analysts said Verizon is likely to keep the Yahoo brand, which is recognized globally and used by about a billion people.
Given Verizon already owns AOL, Giusto says Verizon is probably the best fit for Yahoo instead of the other suitors, which also included private equity firms that specialize in buying distressed companies and trying to rehabilitate them.
However there is speculation over her future despite her telling employees in an email that she was “planning to stay” at the company. The buyout will help Verizon emerge as a formidable rival to Google and Facebook, who dominated the U.S. digital-ad market with a 55 per cent share previous year.
Mayer had been under pressure from shareholders to “unlock” value for Yahoo, whose core business has been effectively held at zero or negative value.
Being that the company with the purple logo had established itself as a advertising & media company, the purchase makes a bit of sense.
Parties as diverse as Warren Buffett and The Daily Mail were interested in buying Yahoo.
Another sharp fall in oil prices pulled down energy stocks on Wall Street on Monday (Jul 25), pushing the main United States indices to a loss after last week’s record highs. With news that Yahoo will be subsumed by AOL, it seems the latter brand “won” by being acquired first.
“Now they can capture some of the dollars they were going to lose on the TV side as viewership switches”, Doshi said.
Advertisement
Mayer, in an interview with Reuters, said she still saw a “path to growth” for Yahoo, especially in mobile.
