Verizon Communications Inc will announce plans to buy Yahoo’s core assets for a bit more than $4.8 billion, said two people with direct knowledge of the situation who asked not to be identified.
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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.
(YHOO) is confirmed, the spotlight will focus on the integration of Yahoo with Verizon’s AOL unit, a job that will be left up to Marni Walden, executive vice president of product innovation and new business organization at Verizon.
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.
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.
For Verizon, the acquisition will help it gain Yahoo’s 1 billion monthly active users, its internet properties and key applications like search and email, and its advertising systems.
Yahoo has hired a succession of CEOs to engineer a comeback, but finally gave up after the high hopes that accompanied Mayer’s hiring fizzled out.
The takeover will double the size of Verizon’s digital advertising, placing it as a distant third behind Google and Facebook in the US$187 billion market.
Yahoo had at one point a year ago 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.
Yahoo had a $37 billion market value at the end of trade Friday, but its Alibaba and Yahoo Japan holdings are estimated to be worth $40 billion or more.
But Yahoo strayed from internet search in an attempt to build a multimedia business, clearing Google’s path to supremacy. But the company’s annual revenue has declined by about
20 percent from $4.4 billion before her arrival to a projected
$3.5 billion this year. However, Mayer’s future may be out of her hands.
But Verizon appeared to be the leading candidate because of its ability to integrate AOL’s advertising technology into Yahoo services.
“The Yahoo acquisition will lead Verizon to spruce up its operations post-AOL acquisition but now more into the profitable digital ad space”.
Until the sale is done, Yahoo’s users should not see any major changes in the company’s mobile apps or websites. “Trying to do what Google and Facebook do is not a good strategy…”
Yahoo will continue as an independent company until the deal receives shareholder and regulatory approval, the companies said.
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Verizon buys Yahoo in a big cash deal, edging out other competitors.
