After much speculation, Yahoo will be acquired by Verizon in a deal worth $4.83bn. The move was officially announced on Monday and will see Verizon extend its audience by another 600m monthly active users.
The carrier plans to create a digital ad magnet by combining Yahoo with its AOL business, which it snapped up in 2015. The deal is still subject to approval by shareholders and regulators.
Verizon acquires Yahoo
In a statement, Lowell McAdam, CEO, Verizon, 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.”
Led by Marni Walden, the executive VP and President of Product Innovation at Verizon, Yahoo will be integrated with AOL.
Verizon hopes to create a new “powerful competitive rival” this way, offering mobile media products to lure advertisers and publishers away from competitors Google and Facebook. Fusing two strong advertising businesses into one could indeed lead to a third behemoth on the market.
Yahoo’s video platform BrightRoll, mobile ad platform Flurry and Gemini will all be added directly to AOL.
Marissa Mayer addressed employees in a blog post, saying:
“Yahoo is a company that popularized the Internet, search, email and real-time media. We built our MaVeNS (mobile, video, native and social) businesses from nothing in 2011 to $1.6 billion in GAAP revenue in 2016 and generated over $1 billion in mobile advertising dollars last year.”
She adds that the company’s key assets include its content brands in finance, news and sports, the 225m monthly active user-strong email service and its advertising products.
Verizon could drive some of Yahoo’s mobile products including its apps forward to reach an even greater audience. However, it remains to be seen what exactly Verizon will do with the plethora of content, app and mobile products Yahoo has built over the years.
The deal is expected to close in Q1 2017. For now, Yahoo continues to operate independently.