After days of speculation, Verizon has reached a deal to buy Yahoo for $4.83 billion, the companies announced early Monday. The nation’s largest wireless carrier paid $4.4 billion for AOL a year ago.
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Yahoo will be integrated with AOL under Verizon executive Marni Walden.
Yahoo Inc., Sunnyvale, California, is parting with its email service and still-popular websites devoted to news, finance and sports in addition to its advertising tools under pressure from shareholders fed up with a steep downturn in the company’s revenue during the past eight years.
The transaction is expected to be completed by the first quarter of next year, subject to regulatory approvals, ending a long-drawn out bidding process for the company.
Current Yahoo shareholders will keep the company’s lucrative investments in Chinese e-commerce giant Alibaba and Yahoo Japan.
FILE – In this April 7, 2013, file photo, the Verizon studio booth at MetLife Stadium in East Rutherford, N.J. Verizon has agreed to buy online portal Yahoo Inc. for roughly $5 billion, according to multiple media reports sourcing unnamed sources.
When millions of people began to flock to the internet with the advent of graphical web browsers in the 1990s, Yahoo was king.
In a separate post on social justice warrior blogging site Tumblr, the proven worst acquisition made under her tenure, soon to be outgoing Chief Executive Officer Marissa Mayer spun the acquisition as yielding “a great outcome for the company” that presents “exciting opportunities to accelerate Yahoo’s transformation”.
In a memo to Yahoo employees, CEO expressed pride in her accomplishments with the company.
Yahoo has been in restructuring mode for almost four years under Mayer. Verizon bought AOL – another faded internet star -in a $4.4 billion deal a year ago, which gave it ownership of the Huffington Post, Techcrunch, Engadget and other news sites.
United States internet firm Yahoo announced in February that it was looking at “strategic alternatives” for its core internet business.
After those issues are resolved, she said she is “very open-minded”.
The Yahoo acquisition will lead Verizon to spruce up its operations post-AOL acquisition but now more into the profitable digital ad space. Yahoo will also retain its cash, convertible notes, certain minority investments, and a noncore portfolio of patents called Excalibur. The company is hoping to have a mobile audience of 2 billion people by 2020, with a goal of $20 billion in mobile revenue by that time.
Yahoo says it has more than 1 billion users, though Outsell analyst Randy Giusto believes only about 200 million are habitual visitors. The stock was trading above $39 a share on Monday morning.
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The story has been corrected to fix a misspelling on the first reference to Yahoo CEO Marissa Mayer’s last name. Michelle Chapman contributed to this story from NY.
