Yahoo will be bought by American telecom giant Verizon Communications for almost Dollars 5 billion (about Rs 32,358 crore) in cash, ending a two-decade run as an independent company for the Internet pioneer.
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Marissa Mayer directly addressed Yahoo’s employees on Monday, writing a note that said the company was able to “change the world” and that it will continue to do so under Verizon. Yahoo will now be integrated with AOL under Marni Walden, EVP and president of the product innovation and new businesses organisation at Verizon.
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.
Verizon’s acquisition of Yahoo’s operating business, which follows its purchase of USA mass media corporation AOL in May 2015, shows the company sees online content and advertising as primary drivers of growth in the future.
Among the best-known names on the internet, Yahoo was one of the first companies that enabled users to find their way online, but has lost its role as a leader. Ars said she seems likely to leave (especially with a $57 million severance waiting in the wings) although she said she loves Yahoo and “plan [s] to stay”.
“Yahoo has been a long-time investor in premium content and created some of the most beloved consumer brands in key categories like sports, news and finance”, Armstrong said in the statement. Some observers say Yahoo had trouble staying relevant as the internet developed.
Yahoo will still hold on to its stakes in China’s Alibaba and Yahoo Japan, reports Business Insider – both stakes have a total combined value of US$40 billion.
The research firm eMarketer estimated that Yahoo’s share of the digital advertising market would fall this year to around 1.5 percent, with Google getting some 30 percent and Facebook 12 percent.
Also, Yahoo Mail is the world’s one of the most popular email services which boast of approximately 225 million users’ activity per month.
The deal is expected bring an end to Marissa Mayer’s four-year tenure at the helm of Yahoo.
But finally Yahoo informed the other bidders on Saturday that it has sealed the deal with Verizon.
It’s quite possible that Verizon will retain the Yahoo brand as a sub-brand like AOL.
Why Verizon is buying Yahoo?
Ms Mayer, who took the helm at Yahoo in 2012, has made little progress in returning the company to profit.
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The deal includes Yahoo real estate assets, while some intellectual property is to be sold separately, the people said. Mizuho Securities USA analyst Neil Doshi said Monday he values the Alibaba stake at $20 a share, with Yahoo Japan’s assets at $6 a share and the cash position at roughly $7 a share.
