Business

Verizon to acquire struggling Yahoo! for $4.83 billion in cash

Verizon is set to acquire Yahoo’s operating business for approximately $4.83 billion in cash, subject to customary closing adjustments giving it access to Yahoo’s 1 billion monthly active users including 600 million monthly active mobile users through its search, communications and digital content products.

 

Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.

 

According to Lowell McAdam, Verizon Chairman and CEO: “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.”

 

Marissa Mayer, who has been CEO of Yahoo for four years and failed to turn around the company’s fortune says the sale of its operating business, which effectively separates its Asian asset equity stakes, is an important step in Yahoo’s 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,” Mayer added, “Yahoo and AOL popularized the Internet, email, search and real-time media. It’s poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile. We have a terrific, loyal, experienced and quality team, and I couldn’t be prouder of our achievements to date, including building our new lines of business to $1.6 billion in GAAP revenue in 2015. I’m excited to extend our momentum through this transaction.”

Yahoo will join AOL’s The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com, and market-leading programmatic platforms — including ONE by AOL for both advertisers and publishers.

The addition of Yahoo to Verizon and AOL will create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities. Combined, AOL and Yahoo will have more than 25 brands in its portfolio for continued investment and growth.

 

Yahoo’s key assets include market-leading premium content brands in major categories including finance, news and sports, as well as one of the most popular email services globally with approximately 225 million monthly active users. Additional technology assets in the advertising space include Brightroll, a programmatic demand-side platform; Flurry, an independent mobile apps analytics service; and Gemini, a native and search advertising solution.

 

The sale does not include Yahoo’s cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents (called the Excalibur portfolio).

 

The deal is subject to customary closing conditions, approval by Yahoo’s shareholders, and regulatory approvals, and is expected to close in Q1 of 2017. Until the closing, Yahoo will continue to operate independently, offering and improving its own products and services for users, advertisers, developers and partners.

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