Verizon buys Yahoo’s core business for $4.83 billion in digital ad push
Verizon buys Yahoo’s – Verizon Communications Inc said on Monday it would buy Yahoo Inc’s internet business, which has more than a billion active users a month, for $4.83 billion (nearly Rs 32,132.78 crore) in cash, marking the end of the line for a storied Web pioneer and setting the stage for a big new internet push by the telecom giant.
The US’s largest telecommunications company by subscribers will combine Yahoo with another fallen giant of the first internet age, AOL, which it bought last year for $4.4 billion.
“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers,” Verizon Chairman and CEO Lowell McAdam said in the release. “The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”
Yahoo after the sale won’t be an operating company, and will instead function as a stake-holding company with a 35.5% stake in Yahoo Japan and 15% interest in Chinese e-commerce firm Alibaba Group Holding Ltd.
“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,” Marissa Mayer, Yahoo’s chief executive officer, said in a statement on Monday.
The integration of Yahoo will not come without challenges. In its latest results, it reported a second-quarter net loss of $439.9 million as it wrote down the value of Tumblr, the microblogging and social media service it acquired in 2013 for $1.1 billion.
On Monday, the company was valued at $37 billion while Google’s parent company, Alphabet, was valued at $518 billion and Facebook at $349 billion. The price tag for the deal is well below the $44.6 billion Microsoft offered for Yahoo in 2008 or the $125 billion it was worth during the dot.com boom.
In a Tumblr blog post, Ex-Googler Marissa Mayer said she planned to stay at Yahoo, but Verizon’s Marni Walden, who will head the combined company, told CNBC the new leadership team had yet to be determined.