Meanwhile, Yahoo shares tumbled after Verizon announced it would buy the company’s web properties for US$4.8 billion.
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“Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL”, she said. “Yahoo humanised and popularised the Web, e-mail, search, real-time media, and more”, she said.
But finally Yahoo informed the other bidders on Saturday that it has sealed the deal with Verizon. Yahoo’s annual revenue, after subtracting ad commissions, has declined by about 20 percent from $4.4 billion before Mayer’s arrival to a projected $3.5 billion this year. Verizon lost 0.4 per cent.
With its core wireless business maturing, Verizon is expected to keep Yahoo mostly intact to compete with Alphabet Inc’s Google and Facebook Inc in digital ads by tapping into users on sites like Yahoo Finance. Marissa Mayer, CEO of Yahoo, said in a statement.
Mayer’s future role with Yahoo was unclear. Meanwhile, Mayer says she will stay on to see Yahoo through its transition.
But it was not clear if she would remain after the transition.
If Mayer leaves following the sale, she will be in line to receive a severance package valued at $55 million. Those investments, made more than a decade ago, are worth more than $40 billion before taxes, making them by far the most valuable pieces of Yahoo.
– Its initial public offering in 1996 was the largest for a tech startup at the time. Google and Facebook together reap 64 percent of that US market, according to Pivotal Research.
AT& T Inc and Quicken Loans Inc founder Dan Gilbert, as well as firms Vector Capital Management and TPG, were also active in bidding for Yahoo.
Verizon is using Yahoo and AOL to build a mobile video and advertising business to fuel new growth because its wireless unit is expanding more sluggishly now that nearly everyone has a mobile phone and a data plan.
Jackson created a blistering slide presentation previous year in which he criticized Yahoo for missing the mobile computing revolution. Many believe buying Yahoo is a savvy move for Verizon. “Will the advertisers want and support an alternative to Facebook and Google?” asked Steve Beck, managing partner of competitive strategy firm cg42.
“Now they can capture some of the dollars they were going to lose on the TV side as viewership switches”, Doshi said.
It’s quite possible that Verizon will retain the Yahoo brand as a sub-brand like AOL.
The other two businesses Ms. Walden oversees are Verizon’s internet of things operation, which involves connecting objects in the real world to the internet, and telematics, which involves connecting cars to the wireless network.
Mayer had been under pressure from shareholders to “unlock” value for Yahoo, whose core business has been effectively held at zero or negative value.
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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.
