Many people were surprised how far the one-time internet giant fell.
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Verizon will combine Yahoo’s search, email and messenger assets as well as advertising technology tools with its AOL unit, which it bought previous year for $4.4 billion (nearly Rs 29,272.1 crore).
The deal will, however, turn over the popular Yahoo News, Mail and other online services used by more than a billion people worldwide. Instead of being remembered as a pioneer, Yahoo will become a business-school case study of squandered advantages, missed opportunities and old-fashioned bloat. Verizon bought the Yahoo brand as part of the deal and has the option to keep the name. Yahoo has under 3.5 percent of market share and AOL has even less. Verizon lost 0.4 per cent.
Mayer, though, told employees in a Monday email that she intends to stay, though she didn’t say for how long.
The acquisition will see Verizon taking over Yahoo’s email services, news websites, advertising tools, real estate, and certain patents.
But it was not clear if she would remain after the transition. She would walk away with an approximately $55 million severance package if Yahoo’s sale to Verizon ousts her from her job.
Mayer arrived in 2012 from Google seeking to revitalize Yahoo, which at its peak had a market value of over $100 billion.
– Its initial public offering in 1996 was the largest for a tech startup at the time.
Still, Yahoo and AOL’s combined revenues make up a single-digit percentage of the total online ad market, while Facebook and Google account for more than half of it, according to eMarketer.
Verizon prevailed over rival bidders, including AT&T Inc; a group led by Quicken Loans founder Dan Gilbert and backed by billionaire Warren Buffett; private equity firm TPG Capital Management LP; and a consortium of buyout firms Vector Capital and Sycamore Partners.
Being that the company with the purple logo had established itself as a advertising & media company, the purchase makes a bit of sense.
In addition, both companies said the deal is subject to customary closing conditions. “Yahoo humanised and popularised the Web, e-mail, search, real-time media, and more”, she said.
“I don’t think they have enough juice to take down Google and Facebook”, Kay said. Because of redundancies between the Yahoo and Verizon workforces, layoffs at Yahoo are likely, perhaps hitting up to 1 in 5 workers, Gold said.
Yahoo has a global user base of over one billion monthly active users, including 600 million monthly active mobile users, through search, communications and digital content products.
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By pairing Yahoo with AOL, the masters of the ancient times of the internet, Verizon will end up with a media network that could represent a competition for leading digital advertisers, Google and Facebook. “We are friends, so I expect to work very closely with her now and in the future”. Mayer adds the sale of its operating business is an important step to unlock shareholder value for Yahoo.
