But Verizon appeared to be the leading candidate because of its ability to integrate AOL’s advertising technology into Yahoo services.
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Yahoo now has $7.7 billion in cash, in addition to the $4.8 billion it will receive at the close of the deal, which it plans to return to shareholders, Yahoo executives said on the call.
The internet giant will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.
Mayer said on a conference call with investors that she planned to stay at Yahoo through the deal’s close.
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. It wasn’t long ago that Yahoo was once worth around $125 billion, and had an offer from Microsoft to buy its business for almost $45 billion.
Yahoo will continue as an independent company until the deal receives shareholder and regulatory approvals, the companies said. Yahoo fell after Verizon Communications announced it would buy most of Yahoo’s internet businesses for $4.83 billion. If she is terminated, she is due a severance package of approxiamtely $57 million. Later in the year, Google went public and Yahoo began selling some of the stock that it received in its rival as part of the 2000 search engine deal and a legal dispute over alleged patent settlements.
Yahoo buys Broadcast.com for $5.7 billion, giving it key technology to stream audio over the Internet. Before Yahoo, the Internet was a government research project.
Mayer, in an interview with Reuters, said she still saw a “path to growth” for Yahoo, especially in mobile.
“I don’t think they have enough juice to take down Google and Facebook”, Kay said. Yahoo will be rolled into Verizon’s AOL operations.
Verizon, the No. 1 USA wireless operator, has been looking to mobile video and advertising for new sources of revenue outside the oversaturated wireless market.
Yahoo incorporates as a company, raises its first $1 million in venture capital and hires Tim Koogle as CEO to replace Yang.
Given Verizon already owns AOL, Giusto says Verizon is probably the best fit for Yahoo instead of the other suitors, which also included private equity firms that specialize in buying distressed companies and trying to rehabilitate them.
The deal, expected to close in early 2017, marks the end of Yahoo as an operating company, leaving it with a 15 percent stake in Chinese e-commerce company Alibaba Group Holding Ltd (BABA.N) and a 35.5 percent interest in Yahoo Japan Corp (4689.T).
Combined, the two companies will have 25 brands and about 225 million active monthly users.
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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.
