Verizon Acquires Yahoo for a Cool $4.8 Billion
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Verizon has announced a deal to purchase Yahoo’s core assets for $4.8 billion, which is a far-cry from the $125 billion valuation it enjoyed, Forbes reports. The deal, in conjunction with Verizon’s 2015 acquisition of AOL, will expand the telecom giant’s internet presence considerably and bring Yahoo’s one billion monthly users into the fold.
Verizon has been branching into the content creation business and has been aggressively snapping up new streams of digital advertising revenue, The New York Times reports. It remains to be seen how well Verizon will be able to marry up Yahoo’s assets, such as its e-mail service and search engine, with AOL’s digital content portfolio, which includes the Huffington Post.
The move also consolidates the operations of two large Apple partners. According to Apple Insider, Verizon is one of the largest iPhone carriers in the world while Yahoo remains the default search engine on many of its products.
The acquisition marks a merciful end to Yahoo’s painful and protracted slide into obsolescence. Once a pioneering search engine, Yahoo has been seen in recent years as the Sick Man of Tech. It was a reputation that Yahoo’s CEO Marissa Meyer, whose arrival was once hailed with messianic overtones and Obama-style “Hope” posters, failed to reverse.
The erstwhile Steve Jobs 2.0 attracted criticism for her questionable management style and her decision to spend over $1 billion on a Tumblr acquisition that ultimately proved to be a huge waste of money, according to report by Gizmodo. Instead, it was ultimately Yahoo founder Jerry Yang’s $1 billion purchase of a 40% stake in the e-commerce retailing giant Alibaba in 2005 that kept the company afloat. That stake has appreciated handsomely and is currently worth $30 billion, according to Forbes, which is many times more valuable than Yahoo’s core business.
While the Verizon deal is being painted as a damning indictment of her tenure at the helm, Meyer has reportedly negotiated a generous $57 million severance package according to The New York Times, which ought to soften the blow.
