Last year, Verizon purchased AOL – once the go-to internet service for millions of Americans – for $4.4 billion.
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Armstrong, meanwhile, is angling to turn AOL and Yahoo – two pioneering-but-downtrodden Web icons – into an online ad powerhouse to challenge the dominance of Google and Facebook.
Parties as diverse as Warren Buffett and The Daily Mail were interested in buying Yahoo.
With Verizon’s buy-in, the company gets over 1 billion active monthly users, about 600 million of whom are mobile users.
Yahoo executives said the remaining company is structured to “indefinitely” hold its Yahoo Japan and Alibaba shares. It’s possible the companies will reveal their intentions sooner, but they might need some time as a single company to figure things out. BABA, -1.54% – as well as $7.1 billion in cash, a large portfolio of patents, certain minority investments and its convertible notes.
But analysts expect AOL CEO Tim Armstrong – like Mayer a one-time Google executive – to be the driving force behind the combined companies.
It’s unclear what Mayer will do after the deal closes.
As anticipated, the long drawn out auction process for beleaguered Internet company Yahoo has been finalised after it accepted a US$4.8 billion offer from Verizon. “It’s important to me to see Yahoo into its next chapter”, she said. It’s the end of an era, and we’re curious to see what Verizon will do with the Yahoo properties, notably Flickr, Tumblr, and Yahoo Finance. But Armstrong could have a good skill set for Yahoo, McGrath said. “The press has tried to make it a little more of drama camp, but we come from similar backgrounds”.
Mayer also tried to frame the deal in a positive light on the call.
The takeover will double the size of Verizon’s digital advertising, placing it as a distant third behind Google and Facebook in the $187 billion market.
Mayer was appointed to the role in 2012 from Google. Jefferies analyst Mike McCormack said he’s doubtful an older internet brand like Yahoo will bring in the kinds of users that Verizon has been trying to lure with go90. However, it still doesn’t erase the fact that the company had struggled and had declined sales in the past years.
In its announcement, Verizon did not discuss Mayer’s future or its long-term plans for Yahoo.
In December, Yahoo scrapped plans to spin off its Alibaba stake after investors fretted over whether that transaction could have been carried out on a tax-free basis.
Mayer was brought on board in 2012 from Google seeking to revitalise the Silicon Valley icon, which at its peak had a market value of over United States dollars 100 billion.
When millions of people began to flock to the internet with the advent of graphical web browsers in the 1990s, Yahoo was king.
It’s the second time in as many years that Verizon has snapped up the remnants of a fallen internet star. The telecom company has invested in digital content and advertising in recent years, buying AOL and the Huffington Post.
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Investors were less than thrilled.
