The nation’s largest wireless carrier paid $4.4 billion for AOL a year ago. As of Friday, Yahoo was valued at about $37 billion. The combination of AOL, Verizon and Yahoo’s livestreaming rights could help Verizon maintain its foothold in that arena, especially with Twitter making a massive push by cutting content deals with the NBA, MLB and National Hockey League; this fall, Twitter will stream 10 Thursday Night Football games.
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Verizon said it was optimistic about Yahoo’s prospects under its ownership.
Mayer gave birth to her first child, a boy, a few months after becoming Yahoo’s CEO. And while there is little doubt that the advertising technology acquired from these deals will be useful in Verizon’s quest to monetize the company’s 140 million mobile subscribers, there’s been little to no evidence that Verizon is actually competent enough to execute its own game plan. Mayer has already jettisoned 1,900 Yahoo workers since last September.
Verizon’s competitor, AT&T, was also reported to be interested in acquiring Yahoo, as were several private equity firms, including Bain Capital, Vista Equity Partners, TPG and Advent International. Instead, Yahoo tried to buy Google and Facebook in those companies’ formative years, but it was rebuffed and then dwarfed by them.
Despite its historic place in the country’s tech boom-and-bust cycles, Yahoo! has had six CEOs since it incorporated and each executive had a similar set of challenges – primarily, to stave off the growing competition from Alphabet (GOOGL), Facebook (FB) and other tech behemoths that passed by the company.
Most of that money, however, has been flowing toward Google and Facebook, two companies that eclipsed Yahoo during its slide from an online sensation, once valued at $130 billion, to a dysfunctional also-ran. “With Yahoo, Verizon will increase its projected digital ad revenues in the U.S. from 1.8% to 5.2%”. “Yahoo humanised and popularised the Web, e-mail, search, real-time media, and more”, she said. The deal, which is subject to usual regulatory and shareholder approvals, is expected to close early next year.
Moreover, Yahoo has a base of over a billion monthly active users on its key online properties such as Search, Mail, Finance and Tumblr, with roughly 600 million monthly active mobile users who could provide a valuable audience for mobile advertisers. “I am incredibly proud of all that”. The shares have more than doubled since Mayer became Yahoo’s CEO, largely because of the rising value of the Alibaba stake.
The enthusiastic name has been synonymous with the internet’s rise in the 1990s, but now that the internet has matured, it’s not clear whether Yahoo as a brand name will survive. Co-founders Jerry Yang and David Filo began building a web directory as Stanford University graduate students in 1994, and Yahoo quickly established itself as the online hub for tens of millions of people.
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Shares of Yahoo down 2.18% to $38.52 during Monday morning trading, while Verizon decreased 0.52% to $55.81. Yahoo’s first quarter earnings released in April showed that revenue fell 11% to $1.08 billion.
