BY Richard Summerfield
The future of one time internet giant Yahoo! Inc, has finally been settled with news that the company’s core operating business is to be sold to Verizon Communications Inc in a $4.83bn all-cash deal.
The acquisition of Yahoo is the latest deal for a major internet based brand to be completed by Verizon since it concluded a deal with AOL in 2015 for around $4.4bn. Under the terms of the deal, AOL will absorb a number of high profile Yahoo assets, including the company’s ad technology tools, BrightRoll and Flurry, as well as a number of other valuable assets: search, mail and messenger.
Since AOL came under the Verizon banner, the company has invested in and nurtured a number of other internet brands, notably The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com. The company hopes a revitalised Yahoo will help to develop the AOL portfolio moving forward. In a statement announcing the deal, Lowell McAdam, chairman and chief executive of Verizon, said, “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.”
Yahoo and its CEO Marissa Mayer have been under the magnifying glass for some time, and though Ms Mayer has claimed she would like to remain with Yahoo moving forward it, the makeup of Yahoo’s future leadership is yet to be decided.
“Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL,” Ms Mayer noted in a statement. “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.”
The sale of the company’s core business 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. These Asian assets will be held by Yahoo in a company currently known as RemainCo. Once the deal has been completed, the company will change its name and become a registered, publicly traded investment company.
The deal is expected to close in early 2017. In the meantime, Yahoo will continue to operate as an independent organisation until the deal receives the customary shareholder and regulatory approval.