Telecom giant Verizon buys Yahoo for $4.8 billion; to merge Yahoo and AOL
MUMBAI: After much anticipation and speculation, word is out that US based telecommunication giant, Verizon will buy Yahoo for USD 4.83 billion in cash at the end of a closely-scrutinized, six-month sale process.
Yahoo first put itself up for sale in February and it fielded multiple bids from almost 40 different types of buyers including AT&T; Quicken Loans founder Dan Gilbert with financial backing from Berkshire Hathaway CEO Warren Buffett; and private equity firms TPG and Vector Capital Management.
But finally Yahoo informed the other bidders on Saturday that it has sealed the deal with Verizon.
“Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL,” said Yahoo CEO Marissa Mayer in a press release. “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. 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.”
When it comes to how Yahoo, that was the front door to the web for many in the 90s and the early 2000s, and its internal functioning, Verizon has a few plans. It has been decided that Yahoo and AOL will be brought together as a new group that AOL’s CEO Tim Armstrong will supervise. It must be noted that Verizon has earlier bought AOL for USD 4.4 billion last year.
“Our mission at AOL is to build brands people love, and we will continue to invest in and grow them,” he said in a press release. “Yahoo has been a long-time investor in premium content and created some of the most beloved consumer brands in key categories like sports, news and finance… We have enormous respect for what Yahoo has accomplished.”
Marissa Mayer is not expected to stay on board, but that has not yet been confirmed by either company.
Verizon’s acquisition is of “core” Yahoo, which includes search, email, advertising products, and the media business (including Yahoo Finance).
Verizon has made a string of acquisitions in an apparent effort to move beyond a telecom provider into a media-and-mobile-advertising powerhouse that can compete with Google. Many believe buying Yahoo is a savvy move for Verizon. In addition to getting the fifth-most visited web site in the US, Verizon gets assets like Tumblr, Flickr, Polyvore and digital ad tools Flurry and BrightRoll.
(Sourced from nytimes.com and Yahoo Finance)