According to Slate, the marriage of AOL and Yahoo under Verizon’s wing would result into a “powerhouse” of a company, because its traffic along would make them America’s “largest digital media company”. Verizon is not unfamiliar to the acquisition and integration of web companies after its 2015 acquisition of AOL for $4.4 billion, when it acquired similar assets.
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TELECOM giant Verizon will be buying Yahoo Inc.’s core internet properties for US$4.8 billion in cash, making Yahoo the second struggling internet mammoth Verizon has snapped up in its quest to expand beyond wireless and broadband.
The sale does not include Yahoo’s cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents (called the Excalibur portfolio), it said in a statement.
Yahoo has come under pressure from shareholders angry with a downturn in its performance over the past eight years as it lost out to the likes of Google and Facebook.
The sale was announced on Monday US time and is expected to be completed in the first quarter of 2017.
“For me personally, I am planning to stay”. Meanwhile, Mayer says she will stay on to see Yahoo through its transition.
Yahoo will operate independently until the acquisition and then fall under the aegis of the AOL unit chief, Tim Armstrong, a former Google colleague of Mayer.
According to documents filed with regulators, Mayer would get a severance package of United States dollars 55 million if removed within a year of a change of control. After co-founders Jerry Yang and David Filo began building a web directory as Stanford University computer graduate students in 1994, Yahoo quickly established itself as the online hub for tens of millions of people. Immediate competition for Verizon includes Google and Facebook- with the successful acquisition of Yahoo, Verizon will have nearly twice the amount of reach their competitors now enjoy.
The Combination of Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and also will create a scaled alternative offering for publishers and advertisers.
“Google and Facebook are doing such a good job executing”, said Armstrong, who helped lead Verizon’s successful bid for Yahoo.
The price Verizon is paying for Yahoo’s internet assets is a small percentage of its market capitalization of over $125 billion during the peak of the dot-com boom, reflecting how badly the company has fallen out of favor. Both Yahoo and Google have closed down services that millions of people use when they don’t fit with the companies’ strategies.
Verizon shares fell 24 cents, or 0.5 percent, to $55.86.
– In 2013, Yahoo moved to attract a younger audience by buying the online blogging platform Tumblr for $1 billion.
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Mayer believes Yahoo can still come back now it it’s about to join a bigger company in Verizon.
