It was confirmed Monday that Verizon acquired Yahoo’s core business for $4.83 billion in cash. The deal includes Yahoo’s advertising, email service, search, news coverage and mobile activities.
This comes a little over a year since Verizon purchased another early internet pioneer, AOL for $4.4 billion. Yahoo and AOL are expected to merge their activities and will amount to Verizon raising their global ad revenue to 2.2%. Although Google’s 30.9% and Facebook’s 12% are the dominant players, Verizon has a significant and growing stake in the market. The purchase will increase Verizon’s ability to compete in mobile media technology, with its boost of 1 billion additional users.
“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.
Verizon’s purchase of Yahoo and AOL makes for one of the largest portfolios of owned and partnered global brands.
Back in the 1990s, Yahoo was the dominant force of the internet. The company was co-founded by Jerry Yang and David Filo who built the company to function as a web directory for people using the internet. The resource proved to be highly beneficial, making Yahoo a major brand from its humble Stanford University beginnings.
Yahoo began to lose track when moving away from what it did best with search and instead began to focus its company efforts on expanding into a multimedia company. Less focus on search gave more room for a company called Google. As time passed, Google surpassed Yahoo in search power and eventually became the most powerful search engine in the world for internet users. Whenever someone wanted to find something on the internet, the popular phrase, “Google It” became a frequently used expression in society and still is to this day.
Yahoo was also slow to see the potential of social media and mobile. By the time Yahoo made its attempt to buy Google and Facebook, it was too late.
There is no definitive answers as to whether or not CEO Marissa Mayer will be staying on with the company. Marissa Mayer had bought upwards of 50 companies while in charge, in order to grow Yahoo products and build a larger network of talent. If Mayer leaves following the sale, she will be in line to receive a severance package valued at US$55 million.
Verizon’s deal is expected to close in the first quarter of 2017.