Yahoo: $5 Billion Take Over Bid by Verizon
Verizon has announced a $4.8bn (£3.7bn) takeover of Yahoo on Monday, 22 years after the internet pioneer was founded in the early days of the world wide web.
After a long and tumultuous sales process that Yahoo boss Marissa Mayer at first resisted, Verizon, the US telecoms giant, announced its purchase of Yahoo’s core internet business, which includes its homepage, email services and news, on Monday. It said it expected the deal to close in early 2017.
Many had expected Ms Mayer to leave the business, but in an email to staff she said: "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."
Shareholders will be left with the company’s 15pc stake in Alibaba and 36pc of Yahoo Japan, a separate entity, as well as a portfolio of patents. While Yahoo still has more than a billion visitors to its websites every month, it has been surpassed by newer internet advertising giants Facebook and Google, and failed to adapt.
Marissa Mayer was put in charge of Yahoo four years ago CREDIT: GETTY IMAGES
This has seen the value of Yahoo’s core business plummet to the extent that its stake in Alibaba now accounts for the majority of the company’s $38bn value. The $4.8bn price of Yahoo’s core business compares to a high of $125bn at the peak of the dotcom bubble in 2000.
Mayer had been under pressure to separate the valuable Alibaba shares from the struggling internet business, and had originally wanted to spin off its stake in the Chinese company. However, she was thwarted when US regulators said it would result in a heavy tax bill, leadingYahoo’s board to put the core internet business itself up for sale.
Verizon, which last year bought AOL, owner of the Huffington Post and another giant of the web’s earlier years, will bring the two together to create an new internet media powerhouse. “For all the wobbliness of Yahoo's brand identity, [it] still holds a lot of consumer-affinity,” said Forrester analyst Shar VanBoskirk. “Consumers like the Yahoo brand.”
Lowell McAdam, Verizon's chief executive, said: "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."
Yahoo, which was formed as a directory of the web in 1994 and grew by adding services like email, photo sharing and sports, finance and celebrity news, which became its most valuable property, was surpassed as so-called web portals such as MSN and AOL were replaced first by search engines and then social media.
Ms Mayer joined in 2012 and has earned an estimated $200m during her time in charge, but failed to revive the company despite several high-profile acquisitions including the social network Tumblr and video advertising service BrightRoll.
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