Yahoo will operate independently until the acquisition and then fall under the aegis of AOL unit chief, Tim Armstrong, a former Google colleague of Mayer.
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“The Yahoo acquisition will lead Verizon to spruce up its operations post-AOL acquisition but now more into the profitable digital ad space”. He believes Verizon’s strength is in building a “house of brands”.
In a note to employees on Monday, Yahoo Chief Executive Marissa Mayer said: “Today’s announcement not only brings us an important step toward separating Yahoo’s operating business from our Asian equity stakes, it also presents exciting opportunities to accelerate Yahoo’s transformation”.
Do you remember using Yahoo to access the internet in the 1990s?
Yahoo is expected to sell its email service and news, finance and sports websites in addition to its advertising tools under pressure from shareholders fed up with a downturn in the companys revenue during the past eight years. But despite an early start, Yahoo failed to create a niche in either the media industry or the technology world, unlike internet search leader Google or social networking giant Facebook.
“Yahoo gives us scale that is what is most critical here, Marni Walden, who is head of product innovation and new business at Verizon told CNBC, adding that the company’s audience will go from the millions to the billions”.
Mayer arrived in 2012 from Google seeking to revitalize Yahoo, which at its peak had a market value of over 100 billion. The deal also excludes some patents and Yahoo’s cash.
After a few days full of rampant speculation, Verizon finally confirmed yesterday night that it had reached an agreement to purchase Yahoo’s core business for $US4.8 billion ($6.4 billion).
The publication said investors seemed positive about the deal, with one congratulating Mayer directly and other extending congratulations to the entire Yahoo management team for putting together the deal.
The sale could potentially result in thousands of layoffs.
Yahoo was synonymous with the Internet itself in the late ’90s. It proved that internet companies could indeed be profitable as other dot-com startups burned through millions of dollars.
Despite the sad ending for two companies that were once internet giants, the Los Angeles Times noted there could still be profitability in the future for Yahoo.
The sale completes Yahoo’s evolution from influential search pioneer and web portal juggernaut to, in the end, a once-dominant brand that lost its way.
Parties as diverse as Warren Buffett and The Daily Mail were interested in buying Yahoo.
The deal comes about two years after Starboard began campaigning for changes at Yahoo.
“I don’t think they have enough juice to take down Google and Facebook”, Kay said.
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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.
