The nation’s largest wireless carrier paid $4.4 billion for AOL a year ago.
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“We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential”, Armstrong said in a printed statement.
Indeed, Mayer – whose four-year tenure atop Yahoo has been blasted by critics as a failure – is now expected to remain chief executive just until early 2017, when the mega-merger is expected to close.
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”. Verizon, as a data provider, can track and study its users habits and searches, and like Facebook and Google, can position itself as a better advertiser given the data they can harness from the service they provide their clients.
However, Yahoo’s cash, its shares in Alibaba Group Holdings and Yahoo Japan, plus a portfolio of patents, will continue to be held by Yahoo, but it will change its name and begin trading as an investment company. Big money, certainly, but not much, considering Yahoo was worth $125 billion at its peak in January 2000.
It’s official: Yahoo’s days as an independent company are over. It’s really hard to build new businesses. Starboard pushes for entire Yahoo board, including Ms Mayer, to be removed.
The sale potentially could result in thousands of layoffs.
True, Armstrong and Mayer worked together for a decade at Google, and the two have always been cordial, despite Mayer spurning Armstrong’s proposal of a Yahoo-AOL merger in 2014. She would walk away with an approximately $55 million severance package if Yahoo’s sale to Verizon ousts her from her job. It proved that internet companies could indeed be profitable as other dot-com startups burned through millions of dollars.
The sale completes Yahoo’s evolution from influential search pioneer and web portal juggernaut to, in the end, a once-dominant brand that lost its way.
But Mayer struggled to slow Yahoo’s overall ad sales decline. Yahoo hasn’t laid out plans for its investments in Alibaba and Yahoo Japan. She said she was “open-minded” about a possible role with the combined companies.
May: Verizon is front runner in bidding for Yahoo.
He said the acquisition of Yahoo! would make Verizon a top global mobile media company, and increase its digital advertising revenue. Jefferies analyst Mike McCormack said he’s doubtful an older internet brand like Yahoo will bring in the kinds of users that Verizon has been trying to lure with go90.
Even with AOL and Yahoo, Verizon would still be far behind s Google and Facebook.
While Verizon also wants Yahoo’s ad services, it is also prizes the hordes that still regularly visit to pick up their email, check the weather and catch up on current events, celebrity gossip and the stock market. Mobile revenue at $378 million lagged behind the company’s desktop revenue of $875 million in the second quarter.
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It marks the end of 20 years of independence for Yahoo. Yahoo stock has risen 18.4 per cent so far this year.
