Verizon Communications, America’s largest wireless communications service provider, is now up to purchase multinational tech firm Yahoo!, with its web search engine and online advertising business, all for a reported total value of about $4.8 billion. Anonymous sources familiar with the matter say that the two companies have been in negotiations since Friday July 22, and confirmed that a deal has been struck as of Sunday July 24.
BBC reports that Verizon also plans to merge Yahoo! with one of its 2015 acquisitions – former internet heavyweight AOL (for $4.4 billion) – in an effort to form a new tech group that can compete effectively against the twin towers of Google and Facebook.
As far back this year as February, Yahoo! has been announcing to the public its search for alternative means to buoy its central business of searching and advertising on the net, which has been floundering very badly in the face of a radically altered online market to the point of steadily becoming irrelevant in today’s internet. All this is in spite of concerted efforts by current CEO Marissa Mayer to seek out new avenues of profit for the company that would harken back to its glory days of the late 90’s and early 2000’s.
Things have gotten so bad that as of last week Yahoo! owned up to a second quarter drop worth $440 million. Mayer was quick to add however that their “strategic alternative” – offering itself for sale – has made great progress; indeed, several major companies such as Britain’s The Daily Mail got to express interest in acquiring Yahoo! as a new asset. Verizon Communications had also thrown its hat into the ring. By April it had ended up in Yahoo’s 10-name shortlist, and as July approached it became a clear frontrunner among other corporate hopefuls.
The multi-billion dollar deal will also gain for Verizon all internet properties (like its own acquisition Tumblr) and real estate of the venerable online pioneer. Both companies have kept quiet on the transactions, opting instead to break the news on Monday July 25 just before the start of US trading.
Having already snapped up AOL last year, Verizon owns several prominent online news sites like The Huffington Post and Techcrunch. The wireless service company also made use of AOL’s tracking information to gather data on its mobile network subscription base through the users’ cellphones, in order to present “personalized” advertising to its customers.
As for the Yahoo! acquisition and merger with AOL under Verizon’s umbrella, it is projected that Verizon-AOL’s CEO Tim Armstrong would take command at Yahoo! as well at the end of it. Both he and Marissa Mayer have worked in Google before. Once the deal has been finalized and carried out, Verizon could well call itself the champion of the idyllic days of internet in the 1990’s.
Photo Credit to www.quora.com