Excluding items related to mark-to-market pension and benefit re-measurements, early debt redemption and tender offers, adjusted earnings were 94 cents a share, above analyst expectations for 92 cents a share.
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Verizon has been shifting its wireless customers to noncontact plans that have a cheaper monthly service rate but require customers to pay full price for their device, usually in installments. Mayer was plucked from Google in 2012 after being passed over for a promotion.
The company was founded in 1994 by two Stanford University students, Jerry Yang and David Filo, as “Jerry and David’s Guide to the World Wide Web”.
CEO Lowell McAdam told investors during the telco’s second quarter earnings call that the “one fiber” strategy in Boston could be replicated in other cities.
Although Verizon sees Yahoo as a complement to these investments, this most recent acquisition may not deliver as much as Verizon hopes.
Verizon reported 615,000 retail postpaid net additions in second-quarter 2016.
We know what’s next for Yahoo – the company will create and manage a new entity labeled “Remain Co.”, which includes Yahoo’s many other assets, including its stake in Alibaba Group Holding Ltd (NYSE: BABA) and Yahoo! “We want to compete and that is the place we need to be”. In a release, Mayer spoke about her association with Yahoo! and its team, and said, “For me, personally, I’m planning to stay”.
“What’s exciting about the Verizon transaction is that it brings us back to growth sooner”, she said. But she also said it was still up in the air as to whether she would have a role at the new company. That notwithstanding it still has a lot of properties on the internet, a large number of customers that are now using their email.
Until the sale is done, Yahoo’s users should not see any major changes in the company’s mobile apps or websites.
The stock had climbed 21% through Monday’s close.
The integration of Yahoo will not come without challenges. In 2013 Mayer led Yahoo’s acquisition of blogging startup Tumblr for $1 billion, promising at the time “not to screw it up”.
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The deal comes with Yahoo, a onetime leader in the online space, coping with years of decline and struggling to keep up with rivals like Google and Facebook. Sales were $30.5 billion, a 5.3% drop from a year ago. Verizon is clearly interested in the scale that Yahoo’s businesses can provide, said Rita McGrath, a professor at the Columbia Business School, and so has no real incentive to pare down its newly acquired firm. Mayer had been devoted to keeping Yahoo as a single business entity and focusing on its own products, but a year ago activist shareholders began agitating for breaking up the company and selling pieces off.
