Verizon has announced that it will acquire Yahoo’s operating business for $4.83 billion in cash, subject to customary closing adjustments. Yahoo was at one point worth a staggering $125bn business.
But $4.83 billion is a remarkable amount of money for a company whose name has become shorthand for online businesses falling from grace. Last quarter, Yahoo lost $440m, according to the reports.
Verizon will now expect to merge Yahoo with AOL, the company it bought last year for $4.4bn. A Yahoo-AOL pairing has been expected for a while now.
This acquisition will help Verizon compete with Google and Facebook, who are in the front when it comes to market domination of online advertising.
Lowell McAdam, Chairman and CEO of Verizon said, “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.”
Marissa Mayer, CEO of Yahoo said, “Yahoo and AOL popularized the Internet, email, search and real-time media. It’s poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile. We have a terrific, loyal, experienced and quality team, and I couldn’t be prouder of our achievements to date, including building our new lines of business to $1.6 billion in GAAP revenue in 2015. I’m excited to extend our momentum through this transaction.”
We are supposed to hear more concrete details from Verizon in soon.