Verizon is buying Yahoo for $4.83 billion, marking the end of an era for a
company that once defined the internet.
The sale announced on Monday marks the second time in two years that Verizon has snapped up the
remains of a fallen internet star as it broadens its digital reach. America’s largest wireless
carrier paid $4.4 billion for AOL last year.
This deal has been in the works for a while and Verizon feels excited to have won the Yahoo bidding after a five-month auction.
Reports suggest that Yahoo Inc. is parting with its email service and websites devoted to news, finance and sports. Interestingly, the all-cash deal includes Yahoo real estate, but excludes some intellectual property which will be sold separately.
Yahoo will be left with its stakes in Alibaba Group Holding Ltd. and Yahoo Japan Corp., with a combined market value of about $40 billion.
Yahoo’s advertising tools which has been under pressure from shareholders for its overall inefficacy to register meaningful growth has been largely blamed for the company’s downturn in revenue during the past eight years. The deal is expected to be closed in first quarter of 2017.
Big News But Nothing Surprising
Everyone might consider this to be a shocking news for the industry, but those who have followed Yahoo’s trajectory over the past few years would have seen this coming. The only question is how will Verizon make use of Yahoo’s resources and integrate them into their ecosystem.
With this deal, Verizon subscribes to Yahoo web services that as reports inform, still draw 1 billion monthly users, including mail, news and sports content and financial tools.
The largest U.S. wireless carrier also gets smaller but faster-growing assets including mobile applications and advertising technology for video and handheld devices.
Marissa Mayer, CEO, Yahoo Inc
Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL. The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo
She further goes onto add,
This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social. Yahoo and AOL popularized the Internet, email, search and real-time media
(With agency inputs.)