The communications giant expects to save $500 million in operating costs over the next year due to new labor contracts and for 2016 adjusted earnings to be at a level comparable to 2015, with the exception of the 7 cents a share loss due to the work stoppage.
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The acquisition, expected to close in early 2017, pending shareholder and regulatory approval, will exclude Yahoo’s cash, certain patent holdings, and its big share in China’s Alibaba Group and stake in Yahoo Japan.
“There’s very few companies with the size and scale of Yahoo, who have the customer loyalty and consumer loyalty that they have”. The pressure is on Verizon to show it can make money from content, especially once it will have spent $9 billion to acquire Yahoo and AOL.
Spelling out what the deal would mean to Verizon, Marrisa Mayer said that Yahoo’s products and brand will be central to achieving the goals set by the largest U.S. wireless communications service provider. “I love Yahoo, and I believe in all of you”.
With the sale of its core, Yahoo will be left as a separate investment company and change its name after the transaction.
As for wireline, Verizon reported increased growth of 3.7 percent, to $2.8 billion.
“With more than 100 million wireless customers, a shared view of the importance of mobile and video ad tech, a deep content focus through AOL, Verizon brings clear synergies to the table”. But recently it has lost its leadership position to Google, Facebook and other companies.
AOL CEO Tim Armstrong sees the positive in it all.
Mayer’s future role with Yahoo was unclear.
“For me personally, I’m planning to stay”, said Mayer in a memo to employees posted on Tumblr.
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Yahoo used to be amongst the leading internet companies in the world, and it was founded in 1994. The stock has risen 21 percent in the last 12 months. Revenue of $30.5 billion missed Wall Street expectations of $30.96 billion. Verizon, which has access to 150 million unique monthly AOL users, will gain an additional 200 million unique visitors that come to Yahoo’s sites every month.
