Verizon reveals it is acquiring Yahoo for US$4.83 billion

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Verizon reveals it is acquiring Yahoo for US$4.83 billion
Yahoo CEO Marissa Mayer

Verizon officially announced Monday that it intended to acquire the operational assets of Yahoo, a US$4.83 billion deal that vastly expands the company's media, search and communications assets.

The announcement comes on the heels of months of speculation about a possible Yahoo buyout, as the web giant struggled with slipping ad revenues and web traffic. Yahoo has undergone significant cost cutting efforts this year, including laying off approximately 8,800 employees.

Verizon's competitor, AT&T, was also reported to be interested in acquiring Yahoo, as were several private equity firms, including Bain Capital, Vista Equity Partners, TPG and Advent International.

The deal builds on Verizon's growing portfolio of media solutions, most notably adding to the company's acquisition last year of AOL for US$4.4 billion. The company also owns other media assets, including The Huffington Post and TechCrunch. The Yahoo acquisition will add additional advertising capabilities and a media audience of nearly 1 billion monthly active users.

Verizon said it will integrate Yahoo with AOL, a division led by EVP and president of product innovation and new businesses Marni Walden.

"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," Lowell McAdam, Verizon chairman and CEO, said in a statement about the news.

Specifically, the deal includes Yahoo's operational assets. It does not include the company's cash, shares in Alibaba Group Holdings, Yahoo Japan shares, convertible notes, minority investments and non-core patents. Those assets will operate under a different name after closing as a registered publicly traded investment company.

In an email to employees, posted on Yahoo-owned social media site Tumblr, CEO Marissa Mayer said Verizon "brings clear synergies to the table", particularly around its more than 100 million wireless customers, mobile and video technology, distribution capabilities and previous acquisition of AOL.

"Among the many entities that showed interest in Yahoo, Verizon believed most in the immense value we've created, and in what a combination could bring our users, our advertisers, and our partners… This sale is not only an important step in our plan to unlock shareholder value for Yahoo, it is also a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising, and social," Mayer said.

"Yahoo is a company that changed the world.  Now, we will continue to [do so], with even greater scale, in combination with Verizon and AOL," she said.

The deal is expected to close in the first quarter of 2017, pending closing conditions, shareholder approval and regulatory approval. 

This article originally appeared at crn.com

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