A blog posting by Marissa Mayer, chief executive officer of the USA tech company based in Sunnyvale, California, on Monday called it “a big day for Yahoo” as the news broke out that it had agreed to sell operating business to Verizon for 4.83 billion US dollars in cash.
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However, the acquisition doesn’t include Yahoo’s cash, its shares in Alibaba Group Holding Ltd., its shares in Yahoo Japan, and Yahoo’s noncore patents such as the Excalibur portfolio. Ms Mayer, who was the highest paid female CEO in the United States in 2015, laid off 15 per cent of Yahoo’s workforce and closed unprofitable services in the last few years, but her efforts to turn around the company ended in a failure. While many will see the acquisition as proof that Mayer failed at CEO, she’s quick to point out all of the accomplishments that have taken place at Yahoo since her arrival.
Armstrong-who previously one of Google’s top ad executives-would seem the logical choice to help run Yahoo, given Verizon’s emphasis on digital advertising.
“Seven West Media will have an opportunity, in the period between being formally notified of a transaction and final completion, to consider which options it selects or a combination as may be negotiated with the new owners of Yahoo, Inc that creates the most value for Seven West Media shareholders”.
However, the move could force Verizon to lay off Yahoo employees to eliminate overlapping jobs and services in Yahoo and AOL.
“The deal speaks to a clear strategy shift at Verizon”, said Moffett- Nathanson analyst Craig Moffett. Yahoo’s shares in Alibaba and Yahoo Japan are estimated to be valued at $31.2 billion and $8.3 billion respectively.
The agreement announced by the two companies after months of negotiations comes following a years-long decline for the iconic firm that introduced many people around the world to the internet.
Forrester Research analyst Shar VanBoskirk said combining the firms could allow Verizon to get better data on customers across mobile, television and internet to improve advertising as well as content.
In its announcement, Verizon did not discuss Mayer’s future or its long-term plans for Yahoo.
Instead, Yahoo tried to buy Google and Facebook in those companies’ formative years, but it was rebuffed and then dwarfed by them. Mayer has already jettisoned 1,900 Yahoo workers since last September.
Verizon makes most of its money from mobile phone connections while Yahoo generated more than twice as much revenue from search and display ads on desktop computers than it did from its so-called MAVENs businesses (Mobile, Video, Native and Social).
In an email to staff, Mayer says she was “planning to stay”, adding: “I love Yahoo and I believe in all of you”.
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Verizon bought AOL – another faded internet star -in a $4.4bn deal a year ago, which gave it ownership of the Huffington Post, Techcrunch, Engadget and other news sites.
