It will pay just $4.83 billion (4.4 billion euros) in cash.
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Yahoo Chief Executive Officer Marissa Mayer said on a conference call with investors that she planned to stay at Yahoo through the deal’s close. “We have enormous respect for what Yahoo has accomplished”. “It’s important for me to see Yahoo into its next chapter”, quotes Sydney Morning Herald.
The deal will see the Yahoo News, email and other assets integrated into Verizon’s recently acquired AOL unit, while Yahoo will be left as a separate investment company holding Yahoo Japan and the company’s most valuable asset, a huge stake in China’s Alibaba Group. Yahoo has 600 million monthly active users, making its properties among the most visited on the Internet, but the long-ailing Web giant fell far behind Google in converting those eyeballs into revenue. “Among the many entities that showed interest in Yahoo, Verizon believed most in the vast value we’ve created, and in what a combination could bring our users, our advertisers, and our partners”.
Mayer arrived in 2012 seeking to revitalize Yahoo, which at its peak had a market value of over $100 billion.
The deal marks the end of Yahoo as an operating company. The deal also excludes some patents and Yahoo’s cash. Verizon is buying Yahoo’s real estate, along with the online operations.
Mayer’s future role with Yahoo was unclear.
The sale could potentially result in thousands of layoffs. Mayer has more options to purchase more stocks valued at US$43.4 million (A$57.98 million) and she earned nearly another US$4 million (A$5.34 million) in stock for 2016. “Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers”. The company also failed to rise up to new market opportunities such as social networking and mobile.
The name change is a strong indication that Verizon intends to retain the Yahoo brand on many services, an idea that Mayer told the AP came up in the preliminary discussions leading up to the deal.
Despite Yahoo’s troubles, its operations are attractive to Verizon because the wireless carrier is looking to capitalize on the growing number of people living their digital lives on smartphones.
Since 2013: Acquisitions worth US$3 billion (S$4.1 billion) do not translate to growth for Yahoo as it struggles to keep up with changing Internet advertising landscape.
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.
The move is a big one for Verizon, as it already holds AOL’s portfolio that includes The Huffington Post.
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While Verizon prizes Yahoo’s ad services, it covets the hordes that still regularly visit to pick up their email, check the weather and catch up on current events, celebrity gossip and the stock market. Mobile revenue at $378 million lagged behind the company’s desktop revenue of $875 million in the second quarter.
