Verizon Buys Yahoo For USD 4.83 Billion

Verizon

US telecommunications giant Verizon has given a lease of life to struggling internet search engine Yahoo by buying it out with a USD 4.83 billion deal. This, however, is seen as one of the saddest moment of the tech industry, as once a USD 125 billion behemoth, is sold to Verizon for comparative chump change.

According to the deal, Verizon will pay USD 4.8 billion for Yahoo’s core business, excluding its successful Asian ventures – a 15 per cent stake in the Chinese online marketplace Alibaba and its 35 per cent holding in Yahoo Japan – as well as some patents.

“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertiser. 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,” said Lowell McAdam, Chairman & CEO, Verizon.

“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. 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. Yahoo and AOL popularized the Internet, email, search and real-time media,” said Marissa Mayer, CEO, Yahoo.

The value of those remaining assets is estimated at around USD 40 billion.

Founded by Jerry Yang and David Filo, Yahoo was one of the early internet pioneers which launched 22 years ago. However, it failed to adapt to the wave of new technology in search, social, and mobile and was constrained to a web portal. Since the launch of Google and Facebook and the advent of social media, the search engine had been struggling to keep its head above waters for some time now.

Reports also suggest that the deal is expected bring an end to Marissa Mayer’s four-year tenure at the helm of Yahoo. The company has been the subject of speculation about its future as far back as 2008, when Microsoft made an unsolicited bid to buy the firm for around USD 44.6 billion, which was rejected at the time for undervaluing the company.

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