official: Yahoo’s days as an independent company are over.
Verizon has agreed to pay $4.83 billion for Yahoo (YHOO, Tech30), the
companies said before markets opened Monday.
The sale completes Yahoo’s evolution from influential search pioneer and
web portal juggernaut to, in the end, a once-dominant brand that lost
Parties as diverse as Warren Buffett and The Daily Mail were interested
in buying Yahoo. But after a sale process that dragged on for months,
Verizon (VZ, Tech30), long viewed as the frontrunner, is walking away
with Yahoo’s more than one billion monthly active users.
Current Yahoo shareholders will keep the company’s lucrative investments
in Chinese e-commerce giant Alibaba and Yahoo Japan. They will be spun
into a separate, yet-to-be-named, publicly traded company. The deal also
excludes some patents and Yahoo’s cash.
It also ends a turnaround effort by Marissa Mayer, who joined Yahoo four
years ago and promised to revitalize the company. Verizon and Yahoo have
not commented on who will lead Yahoo once the deal is complete.
It’s unclear what Mayer will do after the deal closes. A spokesman for
Yahoo said it’s "too early to say" whether she will stay on as CEO,
accept a new role at Verizon, or step aside. Meanwhile, Mayer says she
will stay on to see Yahoo through its transition.
"For me personally, I’m planning to stay," Mayer wrote Monday in a memo
to employees posted on Tumblr. "I love Yahoo, and I believe in all of
you. It’s important to me to see Yahoo into its next chapter."
Mayer also tried to frame the deal in a positive light on the call. She
touted Verizon’s potential to "accelerate our revenue stream in digital
advertising" and repeatedly said she was "excited" for the future.
Tim Armstrong, the CEO of Verizon-owned AOL, said he has "enormous
respect for what Yahoo has accomplished" and that integrating the two
former internet powerhouses will "create a new powerful competitive
rival in mobile media, and an open, scaled alternative offering for
advertisers and publishers."
Mayer, like Armstrong, previously worked at Google (GOOG) before taking
over the top spot at Yahoo in 2012. She invested heavily in improving
Yahoo’s mobile products, expanding its audience through the acquisition
of Tumblr and doubling down on premium media content. She brought in TV
journalist Katie Couric as Yahoo’s "global anchor."
But the sale price suggests that Yahoo’s glory days ended long ago. In
2008, for example, Microsoft (MSFT, Tech30) was willing to pay more than
$45 billion for Yahoo, an offer that was rebuffed by cofounder Jerry
Yahoo was synonymous with the Internet itself in the late ’90s. But for
Verizon, the deal is about more than just nostalgia. The telecom company
has invested in digital content and advertising in recent years, buying
AOL and the Huffington Post.