Faded internet star Yahoo Inc! fetches €4.4bn from US telco
US telecoms giant Verizon Communications has confirmed a deal to buy internet pioneer Yahoo Inc's core internet properties for $4.83bn (€4.4bn). The deal ends a lengthy sale process for the fading internet star.
The purchase will boost Verizon's AOL internet business, which it bought last year for $4.4bn, 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."
In a Tumblr blog post, Yahoo chief executive officer Marissa Mayer said she planned to stay at Yahoo, but Ms Walden, who will head the combined company, told CNBC the new leadership team has yet to be determined.
"It's a decade of mismanagement that has finally ended for Yahoo," said Recon Analytics analyst Roger Entner.
"It's the continuation of an extension of Verizon's strategy toward becoming a wireless internet player and a move away from (telecom) regulation for Verizon into an unregulated growth industry."
The deal, expected to close in early 2017, marks the end of Yahoo as an operating company, leaving it with a 15pc stake in Chinese e-commerce company Alibaba Group and a 35.5pc interest in Yahoo Japan.
Verizon, the No 1 US 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.
Verizon could combine data from AOL and Yahoo users in addition to its more than 100 million wireless customers to create data to help advertisers specifically target users based on online behaviour and preferences. Yahoo will continue as an independent company until the deal receives shareholder and regulatory approvals, the companies said.
The sale does not include Yahoo's cash, its shares in Alibaba Group, shares in Yahoo Japan, Yahoo's convertible notes, certain minority investments or Yahoo's non-core patents.
The Alibaba and Yahoo Japan investments are worth about $40bn in terms of their market capitalizations, while Yahoo had a market value of about $37.4bn as of Friday's close. (Reuters)