Verizon is officially acquiring Yahoo’s core business for $4.83 billion in cash, which includes Yahoo’s advertising, content, search and mobile activities.
Yahoo will be integrated with AOL, and Verizon EVP and President of the Product Innovation and New Businesses organization Marni Walden is going to lead the process. AOL CEO Tim Armstrong also mentions Marissa Mayer in his memo though. “For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter,” Mayer wrote in an internal Yahoo memo. The transaction is expected to close in Q1 2017.
Last year, Verizon acquired AOL for $4.4 billion to boost its media and advertising businesses. Verizon remains a giant telecom company, but the acquisitions of AOL and now Yahoo show that the company wants to diversify its revenue and operations.
Once the deal closes, Verizon wants to merge Yahoo and AOL to form a bigger advertising and media subsidiary. This way, AOL gets more scale and reaches enough internet and mobile users to become an advertising giant reaching hundreds of millions or even billions of people.
Eventually, Verizon wants to compete with Google and Facebook when it comes to advertising. Online advertising is currently dominated by the two Silicon Valley-based companies. Verizon wants to become the third way.
This isn’t the first time a telecom company has been looking at ways to provide and operate more than dumb pipes for computers and phones — Verizon now wants to control what’s going through these pipes. And the company is investing a lot of money in this venture.
Courtesy of TechCrunch
