The life for Yahoo! seems to have come full circle. The company that once competed, and emerged victorious, against AOL in the late 90s will now be a part of AOL after Verizon decided to buy it for $4.83 billion in an all-cash deal.
"Verizon Communications and Yahoo! today announced they have entered into a definitive agreement under which Verizon will acquire Yahoo's operating business for approximately $4.83 billion in cash, subject to customary closing adjustments," a Verizon spokesperson said. "Yahoo will be integrated with AOL under Marni Walden, EVP and president of the product innovation and new businesses organization at Verizon."
Yahoo, once a force to reckon with on the web, lost its way after the dot com bubble and particularly after the middle of 2000s when companies like Google and the Facebook leapfrogged it. Yahoo missed the social media bus completely. It was then beaten in the search engine business by Google and it failed to capitalise on its strength in chat and the email, before its competitors left it behind in even those areas.
In a last attempt to save the company, the management brought Marissa Mayer, a celebrated Google executive, to Yahoo as CEO in 2012. However, Mayer failed to revitalise the company that looked completely hopeless in front of Google and Facebook, which currently rule the market for online advertising. Yahoo even tried hard to pivot itself into a pure content and news company, but even those efforts failed.
However, it seems that Yahoo's content is one of the big reasons why Verizon is buying it.
Also Read: Verizon to announce $5 billion deal to buy Yahoo on Monday: Report
"Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers. 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," said Lowell McAdam, Verizon Chairman and CEO.
In its statement Verizon has not clarified whether in the new Yahoo, which will be merged with AOL, whether Mayer will have any role or not. But speculation is that Mayer will not be moving to Verizon even as Yahoo transfers its core business to the US telecom giant.
The deal marks the end of Yahoo as an operating company, leaving it with a 15 per cent stake in Chinese e-commerce company Alibaba Group Holding Ltd and a 35.5 per cent interest in Yahoo Japan Corp.
"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," said Mayer. The sale does not include Yahoo's cash, its shares in Alibaba, its shares in Yahoo Japan, Yahoo's convertible notes, certain minority investments and Yahoo's non-core patents.
(With inputs from Reuters)
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