Verizon said it would provide more detail on the strategy behind the acquisition when it announces second-quarter earnings on Tuesday.
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Verizon chief executive Lowell McAdam announced on Monday that Yahoo would be integrated into its recently acquired AOL unit to create “a top global mobile media company, and help accelerate our revenue stream in digital advertising”.
The parts Verizon isn’t buying Yahoo’s stakes in Yahoo Japan and Chinese e-commerce giant Alibaba Group will get a name change once the deal closes.
Yahoo had at one point a year ago considered spinning off its 15.4 percent stake in Alibaba Holding Group, through a company called Aabaco Holdings, but hesitated on the move because of uncertainties about potential tax implications. Even though they would likely buy back these shares at a discount, Yahoo investors would benefit, according to Eric Jackson, managing director at SpringOwl Asset Management LLC, which owns Yahoo shares.
According to data from TheStreet affiliate BoardEx, Yahoo! has also had 47 directors since 1995, which is considered a high level of turnover. It plunged 94 cents on Monday to close at $43.13.
Technology analyst Jack Gold of J. Gold Associates said the deal makes sense with companies such as Verizon and AT&T seeking to move beyond their role as mere carriers. While Mayer’s future at the company still has yet to shake out publicly, it’s not unreasonable to believe she’ll lose some, if not all, of her current grip on power.
– With its web portal, Yahoo remains an important online destination for email, messaging, news, and video. Should she choose to leave her position – which, so far, Mayer has said she does not plan to do – she would be in line to make a total of $218.9 million between severance pay and her total cash and stock options.
Verizon has agreed to buy online portal Yahoo Inc. for almost $5 billion, the companies announced Monday.
Stanford University computer graduate students Jerry Yang and David Filo begin compiling “David’s and Jerry’s Guide to the World Wide Web” in a trailer on campus. It went public in 1996 in one of the most hotly anticipated stock offerings of the time – surging 270 percent in the first day of trading. Verizon shares (VZ) closed down 0.4% to $55.87, while Yahoo (YHOO) shares were down 2.7% to $38.32.
“Until completion of any change of control of Yahoo, Inc, which Seven West Media understands may take six to nine months in the nature of large and complex transactions, it is business as usual at Yahoo7 here in Australia and New Zealand”.
Like many other major broadband providers, Verizon wants to be more than a “dumb pipe” that just provides internet access, Columbia Business School professor Rita McGrath said. Also, it failed to remain competitive in many of its core markets.
Microsoft offers to buy Yahoo for $44.6 billion.
Global stock markets were mixed Tuesday as oil prices extended losses that are weighing on energy company shares.
Nevertheless, don’t expect Mayer to be chilling in the cozy corner office past her expiration date, insiders said.
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After the sale Yahoo will be left with cash, investments in Alibaba and Yahoo Japan, and some patents.
