“Verizon Communications on Monday announced plans to acquire Yahoo for $4.8 billion in cash, ending months of uncertainty after Marissa Mayer’s battered internet giant company said it would review strategic alternatives,” Tom DiChristopher reports for CNBC.
“Marni Walden, Verizon president of product innovation and new businesses, said on CNBC’s ‘Squawk Box’ that the deal included Yahoo’s core operating business and patents.
The acquisition will help the telecom company in its efforts to build a media company, she said,” DiChristopher reports. “‘Yahoo gives us scale and that’s what’s most critical here. We go from being in the millions of audience to the billions. We want to compete and that’s the place that we need to be, so we’re very pleased with where we are today,’ Walden said.”
“The transaction is seen boosting Verizon’s AOL internet business, which the company acquired last year for $4.4 billion, by giving it access to Yahoo’s advertising technology tools, as well as other assets such as search, mail, messenger and real estate,” DiChristopher reports. “Together, AOL and Yahoo would have about 5 percent of the digital ad market. But on Monday, Walden said she expects AOL and Yahoo to break out of their combined single-digit market share. ‘We’re going to get to double digits,’ she said.”
Read more in the full article here.
“Yahoo was once the king of the Internet, a $125 billion behemoth as big in its time as Facebook or Google are today,” Brian Solomon writes for Forbes. “Now it’s being sold to Verizon for comparative chump change.”
“The transaction ends the independence of one of Silicon Valley’s most iconic pioneering companies. Yahoo’s seventh and final CEO, Marissa Mayer, will reportedly depart with severence pay worth more than $50 million,” Solomon writes. “Over the last four years, Mayer, a former Google executive, tried to right Yahoo’s ship. But her tenure was marred by confused strategy and mismanagement. Revenue peaked in 2008, the year after the iPhone came out, and traffic has continued to fall as users find their attention drawn to younger, more relevant websites and apps.”
“The one thing that kept Yahoo afloat for this long is Jerry Yang’s risky $1 billion bet on Alibaba in 2005. That bought 40% in what would become China’s ecommerce king. Yahoo sold parts of that holding over time, but its current stake is still worth more than $30 billion at today’s prices,” Solomon writes. “The sale will not include the company’s stakes in Alibaba or Yahoo Japan.”
Read more in the full article here.
MacDailyNews Take: A sad, but seemingly inevitable end. As we wrote back in January”
Mayer’s been hamstrung with the STUPID deal her predecessor Carol Bartz inked with Microsoft’s Steve Ballmer (two very confused former CEOs) to use Bing as the search component of Yahoo. Yahoo needed to develop and promote its own technology. If they had their own search, Yahoo would be in a position today to make a serious play to replace Google as the default search engine on the world’s most coveted platform and reap multiple billions of dollars from such a deal. Alas, they are not and, as a result, Mayer has been forced to tinker around the edges while trying to extricate Yahoo from the straightjacket into which her predecessor shackled the company.
And, as we wrote in April: Mayer took on an impossible job and deserves credit for staying with the thing when it would have been easy to simply walk away from the mess she inherited. Marissa Mayer would be a wonderful CEO with the right company.
Mayer’s final letter To Yahoo employees:
Moments ago, we announced an agreement with Verizon to acquire Yahoo’s operating business. This culminates a rigorous, thorough process over many months, and yields a great outcome for the company. Today’s announcement not only brings us an important step toward separating Yahoo’s operating business from our Asian asset equity stakes, it also presents exciting opportunities to accelerate Yahoo’s transformation. 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 is a good moment to reflect on Yahoo’s journey to date.
Yahoo is a company that changed the world. Before Yahoo, the Internet was a government research project. Yahoo humanized and popularized the web, email, search, real-time media, and more.
What really sets Yahoo apart is the shared passion to create great products for our 1B+ users, and in doing so, transforming the world for the better. You can clearly see that spirit, that commitment, that fight in the work we’ve done together over the past few years. We set out to transform this company – and we’ve made incredible progress. We counteracted many of the tectonic shifts of declining legacy businesses, and built a Yahoo that is unequivocally stronger, nimbler, and more modern. We tripled our mobile base to over 600 million monthly users, we invested in and built Mavens from basically zero in 2011 into $1.6B of GAAP Revenue in 2015, we streamlined and modernized every aspect of our consumer products, and, with Gemini and BrightRoll, we dramatically improved our advertiser products. This only scratches the surface of what we’ve achieved… and we all know how much hard work it took to get here.
It’s because of that hard work and resilience, that Yahoo will realize amazing opportunities in its next chapter.
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. As one of the largest wireless and cable companies in the world, Verizon opens the door to extensive distribution opportunities. With more than 100 million wireless customers, a shared view of the importance of mobile and video ad tech, a deep content focus through AOL, Verizon brings clear synergies to the table. And with their aggressive aims to grow global audience to 2B users and $20B in revenue within the mobile-media business by 2020, Yahoo’s products and brand will be central to achieving these goals. Joining forces with AOL and Verizon will help us achieve tremendous scale on mobile. Imagine the distribution challenges we will solve, the scale we will achieve, the products we will build, and the advertisers we will reach now with Mavens – it’s incredibly compelling.
The strategic process has created a lot of uncertainty, but our incredibly loyal and dedicated employee base has stepped up to every challenge along the way. Through the first half of the year, we met our operational goals and overachieved on plan. But, further, there are things that you cannot measure, like the passion of the people behind the products. The teams here have not only built incredible products and technologies, but have built Yahoo into one of the most iconic, and universally well-liked companies in the world. One that continues to impact the lives of more than a billion people. I’m incredibly proud of everything that we’ve achieved, and I’m incredibly proud of our team. 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.
As we work to close this agreement in Q1 2017, it’s more important than ever that we come together as one global team to continue executing on our strategic plan through the remainder of the year. We have delivered the first half of the year with pride, achieving our goals. Now, it is up to us to make Yahoo’s final quarters as an independent company count.
Yahoo is a company that changed the world. Now, we will continue to, with even greater scale, in combination with Verizon and AOL.