The telecommunications Verizon giant strikes a deal to acquire Yahoo’s internet business for $4.83bn (£3.68bn) in cash which includes yahoo’s advertising, content, search, and mobile activities.
Verizon is a telecommunication company of United States providing the wireless service for the cellphones and other mobile devices. Just before some period ago, they acquired AOL to give a boost and enhance their strategies by providing the cross connections to the users. McAdam the chairman and CEO revealed in the release that, this acquisition will put the Verizon in the high competition which will help in the growth and revenue stream in digital advertising.
Yahoo’s stakes in Chinese e-commerce giant Alibaba and Yahoo Japan are not the part of the acquisition which is worth around $40bn. And it is subdivided as 15% stake in Alibaba - $31.2bn, 34% of Yahoo Japan - $8.3bn. Its patent portfolio is around $1bn which is not the part of the sale.
Yahoo had been struggling since a number of years and as the internet developed, it finds it difficult to stand in the competition. Today Google is the most popular one and Facebook, Twitter has changed the way people use the internet. In 2008, Microsoft tried to buy Yahoo for $44 billion but this offer was rejected.
Critics noted that the mayor of Yahoo Marissa Mayer left her job in Google and joined Yahoo in 2012 making $200 millions in four years. She is expected to stay with the company until the Verizon takes over the early next year. The deal is expected to be closed in the first quarter of 2017.
Yahoo will be integrated with AOL and Verizon under the Marni Weldon who is the Vice President of the company. The company will have more than 25 brands in its content portfolio and roughly 1 billion monthly active users and out of that 600 million are monthly active users on mobile. Yahoo is the company that has changed the world and it will continue to do so in the coming years. The transaction is set up with the great opportunities of Yahoo for the further growth in work of mobile, video, advertising, and e-mail, search and real time media.
Verizon now will be facing two challenges. Firstly, this integration would be very tough and as said by the reporters, Yahoo’s headcount stands at 8,800 employees and 700 contractors and comparing with AOL it has 6,800 head counts. So merging this both companies with thousands of employees is not a small deal. Secondly, Yahoo has lost some handsome amount of money, so it will be the key aspect of Verizon to turn into a profitable one.
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