Verizon is expected to announce a $4.8 billion (£3.7bn) deal for Yahoo’s internet business on Monday, ending months of speculation.
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If Verizon fully owned Yahoo right now, it would generate about $3.6 billion in U.S.ad revenue this year to eclipse Microsoft for third place in the market, based on eMarketer’s estimates.
Verizon Communications is believed to have agreed to pay $4.8 billion to acquire Yahoo, one of the early internet pioneers. “Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers”. Yahoo attempted to buy both companies while in their infancy.
Armstrong had worked with Yahoo CEO Marissa Mayer at Google, and the two had reportedly considered merging the two companies in the past. It will be taking a decision on selling the stakes in Yahoo Japan Corp., and Chinese e-commerce company Alibaba Group Holding Ltd, which together make up the bulk of Yahoo’s $36 billion market value.
Verizon will gain access to Yahoo’s advertising technology tools, and assets such as search, mail, and messenger. The company’s market capitalisation is US$229 billion.
Wall Streeters asked Mayer what immediate implications there are on Yahoo’s advertising offering, and whether there are clear revenue synergies.
Yahoo will bring in hundreds of millions more viewers from sites like News, Sports, and Finance to complement Verizon’s popular properties like TechCrunch and Huffington Post. But a reading of his tenure at AOL offers some insight into what the future might mean for Yahoo, which would likely turn into much more of a focused advertising company.
Verizon said the tie-up will still need to win the approval of Yahoo’s shareholders and get the green light from regulators. They have increased 18 percent so far in 2016. In April-June, Yahoo’s loss widened to $440 million and amounted to 46 cents a share, compared with a loss of $22 million, or 2 cents a share, a year ago.
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The buzz is strong that Mayer is not expected to stay on after the deal is done, and it is unclear how many of Yahoo’s current execs will remain, the report says.
