Yahoo shares fell 2.7 per cent after the long-expected Verizon deal was announced.
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When it comes to the fate of current Yahoo chief executive, Marissa Mayer, it is now unclear if she’ll stay on at the company after the deal is completed in early 2017.
In an email to staff, Yahoo chief executive Marissa Mayer said she was planning to remain with the company and she still saw a path for growth for the company. Most importantly, Mayer stated that she plans on staying with Yahoo after the merger.
Logos are seen on a laptop, Monday, July 25, 2016, in North Andover, Mass. Verizon is buying Yahoo for $4.83 billion, marking the end of an era for a company that once defined the internet.
The purchase will boost Verizon’s AOL internet business, which it bought a year ago for $4.4 billion, as it gains access to Yahoo’s ad technology tools, BrightRoll and Flurry, and search, email and messenger assets. The Asian assets account for most of Yahoo’s current market capitalization of $37 billion. 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.
She told a conference call that the agreement is “an exceptional outcome for Yahoo shareholders” and that Verizon was chosen because it “believed in us the most”. “I will be open-minded”, said Mayer, who could receive a severance package valued at $55 million If she leaves following the sale. Shares of Yahoo were down almost 4% Monday afternoon.
Technology companies will dominate quarterly earnings news this week, including results from Apple, Amazon, Google and Facebook. Comcast owns amusement parks, and now through this deal, Verizon is the proud owner of a large portfolio of internet brands, including Flickr and Tumblr.
“The Yahoo acquisition will lead Verizon to spruce up its operations post-AOL acquisition but now more into the profitable digital ad space”.
While the situation indicates that until those roles are spelt out, Mayer still has a job, a new analysis by Equilar, an executive compensation research and consulting company, estimates a US$218.9 million (A$293 million) golden parachute for her. Yet this entity, which doesn’t even have a name yet, is worth more than six times the amount Verizon is paying for the internet portal that web users have known for decades.
The price tag includes “core” Yahoo, which includes search, email, advertising products, and the media business (including Yahoo Finance).
“I’d love to keep Marissa doing what she’s doing overall, but she wants to see what the strategy and structure will be”, Armstrong said. 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.
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Mayer has been under pressure from shareholders to “unlock” value for Yahoo, whose core business has been effectively held a zero or negative value. That along with what she’s already been paid in cash and stock would leave her with a paycheck topping $200 million.
