Its out. The news of perhaps Internet’s once-biggest giant’s demise is official. After months of speculations and rumors, the bidding war for the once largest search engine Yahoo, has finally reached a conclusion. Verizon has confirmed that it is acquiring Yahoo’s core business for a sum of $4.83 billion.
Ever since the search engine went on the market for sale, telecom service provider Verizon has been after its core business, which includes Yahoo’s advertising, content, search and mobile activities — literally all of Yahoo. In addition to this, it will acquire the company’s real estate assets as well. The deal is awaiting customary approval and is expected to close in Q1 of 2017.
Verizon, in the official release adds that Yahoo’s services will be integrated with its previous media acquisition AOL — but will continue to operate independently — and will now be headed by Marni Walden, EVP and President of the Product Innovation and New Businesses. Just like the company has continued to invest and grow the media services of AOL, it plans to do the same with Yahoo — which has been creating premium content and consumer brands for a very long time.
Commenting on the acquisition of Yahoo, Lowell McAdam, Verizon Chairman and CEO adds that,
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.
Though, most of Yahoo’s business is now under Verizon, the former still has some juicy stuff left for itself. The internet giant’s stakes in Alibaba(15%) and Japanese operations (34%) aren’t a part of this acquisition and amount to a total of $40 billion. The $1 billion non-core patent portfolio called ‘Excalibur’ is also not a part of this acquisition deal.
Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL. 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.
believes Marissa Mayer, CEO of 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.
She further adds that Yahoo and AOL are the unmasked mesiahs, who popularized Internet, email, search among the early adopters, and it now joining forces with the same. She says that the team will now lay focus on achieving scalability on mobile devices and keep this momentum going in the future.
AOL CEO Tim Armstrong pitches in and adds that he respects and supports Meyer’s decision for going forward with this merger. He further adds that this acquisition is aimed at unlocking the full-potential of the search giant’s business and working upon collective and powerful synergies, which has been non-existent in the past.
The addition of Yahoo’s advertising and media businesses to AOL creates one of the biggest portfolio of businesses owned by a single tech giant in the world. Once combined, AOL and Yahoo (excluding search and mail) will have more than 25 brands with over 225 million monthly active users in its portfolio. Additional technology assets in the advertising space include Brightroll, a programmatic demand-side platform; Flurry, an independent mobile apps analytics service; and Gemini, a native and search advertising solution.
Last year, it had acquired AOL for $4.4 billion for similar purposes. That acquisition had brought popular media platforms like Huffington Post and Techcrunch under Verizon’s purview. In addition to it, Verizon also got access to video content and programmatic advertising of AOL. With this acquisition, Verizon is targetting the online advertising market that is currently dominated completely by Google and Facebook.