Shortly after the opening bell, Verizon’s shares fell 0.52 percent at 55.81 dollars, while Yahoo inched down 1.68 percent at 38.72 dollars.
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“Google and Facebook are doing such a good job executing”, said Armstrong, who helped lead Verizon’s successful bid for Yahoo.
In some ways, a takeover of Yahoo by Verizon would finally give Starboard what it wanted because the telecom giant acquired AOL previous year.
Verizon is not unfamiliar to the acquisition and integration of web companies after its 2015 acquisition of AOL for $4.4 billion, when it acquired similar assets.
“Our mission at AOL is to build brands people love, and we will continue to invest in and grow them”, Armstrong said in the statement.
It seems unlikely, at least for the moment, that Marissa Mayer will receive the almost $55 million windfall by leaving Yahoo.
In an email to employees, she wrote that “I’m planning to stay It’s important to me to see Yahoo into its next chapter”.
Plus, Mayer is in line to pocket $54.9 million if she leaves upon the change in control.
Mayer arrived in 2012 from Google seeking to revitalize Yahoo, which at its peak had a market value of over $100 billion.
Founded in 1994 by Jerry Yang and David Filo, Yahoo soon emerged as the entry point to the web for a large number of users of its services such as its portal, search engine and email.
The slump deepened even as advertisers pour torrents of cash into what is now a $160 billion market for digital advertising, according to research firm eMarketer.
Yahoo first put itself up for sale in February and it fielded multiple bids from nearly 40 different types of buyers including AT&T; Quicken Loans founder Dan Gilbert with financial backing from Berkshire Hathaway CEO Warren Buffett; and private equity firms TPG and Vector Capital Management.
But Verizon appeared to be the leading candidate because of its ability to integrate AOL’s advertising technology into Yahoo services.
AOL chief executive Tim Armstrong highlighted the “extensive distribution capabilities” Verizon will gain through the acquisition.
But according to Verizon executive and new Yahoo boss Marni Walden, the leadership chart is still being hashed out, and Mayer’s role – whatever it might be, if anything at all – is unclear. 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.
“Investors as of right now should really start thinking of themselves as only Alibaba if they own Yahoo”.
“This is a broad, but benign, sell-off”, said Ryan Larson, head of United States equity trading for RBC global asset management. “It’s the continuation of an extension of Verizon’s strategy toward becoming a wireless internet player and a move away from (telecom) regulation for Verizon into an unregulated growth industry”. Not bad pay for bringing a company to its knees.
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Mayer said her two immediate priorities are seeing the Yahoo sale through to its anticipated close in the first quarter of 2017 and managing the value of its remaining Asian assets.
