Though CEO Marissa Mayer will stay, yahoo to be rechristened.
The US telecommunication giant Verizon has purchased the core assets of one of the search engine pioneers Yahoo! in a $4.83 billion deal today. This takeover will bring to close two decades of independence maintained by the once an internet giant.
Verizon traces its roots to the former ‘Baby Bells’ and currently provides wireless services to over 140 million subscribers apart from its residential and IT services to various corporates, small businesses and the government.
Yahoo! which was incorporated in 1995 grew rapidly and quickly became popular through the 90s but, was greatly hit by the burst of the dot com bubble in the early 2000s. Since then, the company has been trying to cope with the dynamic internet environment. Current CEO and President Merissa Mayer was hired in 2012 to help yahoo cope with its gradual and consistent decline in revenues. The company having been in the restructuring mode for over four years now announced in February that it was looking for ‘strategic alternatives’ for its core internet business.
Yahoo received offers from various other investors including AT&T consortium backed by Warren Buffet and the owner of The Daily Mail. “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,” said Mayer in a letter addressed to her employees posted following the finalization of the deal. “This is a good moment to reflect on Yahoo’s journey to date,” she said.
Verizon, which also acquired AOL last year, plans to merge Yahoo and AOL to create something similar to Google and Facebook. While Verizon adds Yahoo to its list of other acquisitions and mergers, Mayer looks at this deal as an opportunity for Yahoo!
“The 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 in the letter. “As one of the largest wireless and cable companies in the world, Verizon opens door to extensive distribution opportunities. With more than 100 million wireless customers, a shared view of the importance of the importance of mobile and video ad tech, a deep content focus through AOL, Verizon brings clear synergies to the table.”
She also took the opportunity to mention the credible work of her ‘incredibly loyal and dedicated employee base’ that stepped up to every challenge that the company faced in its journey so far. She expressed her pride in her team and their work so far, “I’m incredibly proud of our team. For me personally, I’m planning to stay,” she said.
With the deal planned to be sealed in Q1 of 2017, she hopes to make the final quarters of Yahoo 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,” she said. As yahoo gears up in sealing the deal and journeying towards progress and growth, there will also be a sale of over 3000 patents by the company generating another $1 billion.