Tim Armstrong, chief executive of Verizon’s A.O.L. unit, is tasked with sorting out a possible acquisition of Yahoo’s assets, according to a Bloomberg report.
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Discussions aren’t far along and Verizon hasn’t hired any bankers, but Armstrong is the one leading preliminary discussions, sources said.
Last week, Mayer and Yahoo chairman Maynard Webb announced a revitalization plan includes the option to selling some or all of the company’s core Web advertising and media business among the “additional strategic alternatives” it is exploring.
Yahoo and Verizon declined to comment. By sending Tim Armstrong to steer talks, Verizon is clearly betting on the relationship between him and Marissa Mayer, CEO of Yahoo.
Since its acquiring AOL six months ago, McAdam said Verizon has been feeding information from its mobile division into the “AOL engine” and has successfully driven $300 million in revenue from quarter to quarter. The combination of AOL’s 2 million users and Yahoo’s 1 billion users could give it a strong presence in the video ad market, where it needs to make inroads against rivals Facebook and YouTube.
The addition of Yahoo media to the mix could “turn it into something special”, according to CNBC. The two were both executives at Google before leaving to head their respective companies, and had reportedly considered combining AOL and Yahoo in the past.
Helping Armstrong will be his long relationship with Mayer.
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For the better part of a decade, Yahoo has struggled through leadership changes, failures to gain a foothold in rising trends like mobile, an inability to dispose of valuable stakes in Alibaba Group Holding and Yahoo Japan Corp. without heavy tax costs, and now faces calls for an outright sale by activist shareholder Starboard Value.
