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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The fate of Yahoo’s chief executive, Marissa Mayer, who came under sharp shareholder criticism for failing to arrest the company’s long downward spiral during her four-year tenure, is unclear.
“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. Ms Mayer, who was the highest paid female CEO in the U.S. in 2015, laid off 15 per cent of Yahoo’s workforce and closed unprofitable services in the last few years, but her efforts to turn around the company ended in a failure.
Verizon Communications announced on Monday the completion of its $4.83 billion acquisition of the core business for Yahoo.
With AOL and Yahoo, Verizon would still be far behind internet juggernauts Google and Facebook (FB.O).
Verizon spokesman Bob Varettoni and Yahoo spokeswoman Rebecca Neufeld declined to comment. “I love Yahoo, and I want to see it into its next chapter”.
Although the new Verizon would be No. 3 in the $60 billion US market for digital advertising, “one shouldn’t delude themselves into thinking that it’s a close third place”, MoffettNathanson analyst Craig Moffett said. Instead, Yahoo tried to buy Google and Facebook in those companies’ formative years, but it was rebuffed and then dwarfed by them.
According to Re/code, Yahoo informed the other bidders on Saturday that Verizon had won the process.
Also, Yahoo Mail is the world’s one of the most popular email services which boast of approximately 225 million users’ activity per month. “Because the Yahoo Japan stake is relatively small so you really have cash and an Alibaba tracker at this point”, said John Addis, CIO of Fourworld Capital. Last year, Verizon purchased AOL – once the go-to internet service for millions of Americans – for $4.4 billion.
“Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers”, said Armstrong. Verizon is buying Yahoo’s real estate, along with the online operations. In other words, Yahoo’s core internet business was diminishing its market value.
Under pressure from activist investor Starboard Value LP, Yahoo launched an auction of its core business in February after shelving plans to spin off its stake in Alibaba.
With the sale of Yahoo!
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It would also mark the end of Yahoo as an operating company, leaving it only as the owner of a 35.5 percent stake in Yahoo Japan, as well as its 15 percent interest in Chinese e-commerce company Alibaba Group Holding Ltd.
