What’s more, Yahoo tripled its mobile base to more than 600 million monthly active users over the same span of time and just a year ago, generated more than $1 billion in mobile advertising revenue.
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Last week the firm reported a $440m loss in the second quarter, but said the board had made “great progress on strategic alternatives”.
The deal announced Monday was described as offering synergies for the two firms, as Verizon seeks to expand beyond a carrier and Yahoo needs help in stemming its decline against online rivals Google and Facebook.
In an email to employees, she wrote that “I’m planning to stay…” Yahoo will now be integrated with Verizon-owned AOL under Marni Walden, an executive vice president at the telecom company.
Shareholders fed up with a steep downturn in the company’s revenue over the past eight years pressured Yahoo Inc.to part with its email service and still-popular websites devoted to news, finance and sports, in addition to its advertising tools. “I’m excited to extend our momentum through this transaction”. She said she was “open-minded” about a possible role with the combined companies.
The merging of Yahoo’s online operations with AOL’s sets up a potential reunion between Mayer and Armstrong, who were both executives at Google for years.
“You will see the Yahoo brand but Yahoo as a company pretty much does go away”, said Bob O’Donnell of Technalysis Research. The acquisition is aimed at fueling new growth as the mobile services market continues to shift dramatically.
On a conference call with analysts after the announcement, Mayer repeated that line before adding, “A lot of the integration discussions are still ahead of us”.
The integration of Yahoo will not come without challenges. The takeover will double the size of Verizon’s digital advertising, placing it as a distant third behind Google and Facebook in the US$187 billion market.
The deal marks the end of Yahoo as an operating company.
The Verizon deal would transform Yahoo into a holding company, with a 15 percent stake in Chinese e-commerce company Alibaba Group Holding Ltd and a 35.5 percent interest in Yahoo Japan Corp as well as Yahoo’s convertible notes, certain minority investments and its non-core patents. But even though on paper the Alibaba shares were worth around $25 billion, selling those shares to pay out shareholders was problematic because company would then have to pay billions of dollars in taxes.
While Yahoo has been successful in building a global audience of as many as one billion worldwide, “it hasn’t been able to change and adjust its brand as the market has changed”, VanBoskirk told AFP.
July: Verizon acquires Yahoo’s core business.
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Not everyone says Verizon’s purchase of Yahoo shows the need for privacy rules.
