Verizon Communications Inc would buy Yahoo Inc’s core internet properties for $4.83 billion in cash to expand its digital advertising and media business, ending a lengthy sale process for the fading Web pioneer.
The purchase will boost Verizon’s AOL internet business, which it bought last year for $4.4 billion, as it gains access to Yahoo’s ad technology tools, BrightRoll and Flurry, and search, mail and messenger assets.
- “Yahoo gives us scale that is what is most critical here, Marni Walden, who is head of product innovation and new business at Verizon told CNBC, adding that the company’s audience will go from the millions to the billions. “We want to compete and that is the place we need to be.”
- Yahoo Chief Executive Officer Marissa Mayer said she planned to stay at Yahoo, but Walden, who will head the combined company, told CNBC the new leadership team has yet to be determined.
- The deal, expected to close in early 2017, marks the end of Yahoo as an operating company, leaving it with a 15 percent stake in Chinese e-commerce company Alibaba Group Holding Ltd and a 35.5 percent interest in Yahoo Japan Corp.
- Verizon, the No. 1 U.S. wireless operator, has in recent years looked to mobile video and advertising for new sources of revenue in an oversaturated wireless market. It has also scaled back on its Fios TV and internet service.
- In premarket trading, shares of Verizon were up 0.6 percent at $56.41, while shares of Yahoo dipped about 1 percent at $39.12.
- Yahoo will continue as an independent company until the deal receives shareholder and regulatory approvals.