Yahoo will be rolled into Verizon’s AOL operations and CEO Marissa Mayer may be reunited with AOL CEO Tim Armstrong, who worked with her as executives at Google for years and tried unsuccessfully to convince her to combine the two companies when they both remained independent. It has also scaled back on its Fios TV and internet service.
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Yahoo is keeping its 15 percent stake in Chinese e-commerce company Alibaba and Yahoo Japan, which have a combined value of $40 billion.
Ever since the search engine went on the market for sale, telecom service provider Verizon has been after its core business, which includes Yahoo’s advertising, content, search and mobile activities – literally all of Yahoo. Still, the company will find a home for many of its employees and technologies; Yahoo had a headcount of 8,800 at the end of June, a 20 per cent reduction from a year prior.
Yahoo is also the third-largest U.S. internet property, behind Google and Facebook.
“It’s a decade of mismanagement that has finally ended for Yahoo”, said Recon Analytics analyst Roger Entner.
Yahoo, which was the entry door to the Internet for an early generation of web users, will be integrated with AOL under Marni Walden, EVP and President of Product Innovation and New Businesses organisation at Verizon.
Yahoo’s decision to keep its “non-core” Excalibur patent portfolio, along with its cash, Alibaba stake and Japan business, will fuel speculation that Verizon was not interested in the rights, nearly half of which a study recently claimed could be invalid or have no market value. The deal includes most of Yahoo’s assets, though not the Alibaba shares or Yahoo Japan and several other assets.
Verizon said the tie-up will still need to win the approval of Yahoo’s shareholders and get the green light from regulators. The deal is expected to be closed in first quarter of 2017.
In premarket trading, shares of Verizon were up 0.6 percent at $56.41, while shares of Yahoo dipped about 1 percent at $39.12. It plans to change its name and become a publicly traded investment company.
Verion has confirmed a deal to acquire Yahoo!’s web activities for Dollars 4.83 billion in cash.
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Verizon prevailed over rival bidders for Yahoo, 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.
