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Verizon buys Yahoo

By | Published on Tuesday 26 July 2016

Yahoo

So, US telecoms firm Verizon yesterday confirmed it was acquiring the core business of early-days-web-giant Yahoo for a neat $4.83 billion, which is not far off a tenth of what Microsoft offered for the company back in 2008. So that’s fun.

Though the Verizon acquisition doesn’t include Yahoo’s 15% stake in these-days-web-giant Alibaba, or its 36% stake in the separate Yahoo Japan business, shares which are currently worth more than eight times the value of this deal.

A separate rebranded investment business will also emerge from this arrangement that will retain those lucrative share-holdings. One of the reasons for selling the core Yahoo business is to separate it from the Alibaba equity in a tax efficient way, some shareholders fearing that Yahoo management could have exploited the company’s stake in the Chinese web firm to prop up its own search, social and content businesses.

Regulators and Yahoo shareholders must approve the Verizon purchase, which means the transaction won’t likely be complete until early next year. The plan, though, is to merge Yahoo with AOL, the other flagging former internet star acquired by Verizon last year.

Although both Yahoo and AOL now sit in the shadow of modern day web giants like Facebook, Google and, indeed, Alibaba, they both also boast a number of popular online brands amongst their respective assets and Yahoo alone still somehow reaches over a billion people each month across its sites, and they can’t all be just looking a porn on Tumblr.

AOL CEO Tim Armstrong told TechCrunch yesterday that he hopes, once combined, AOL/Yahoo will be able to secure a monthly reach of over two billion people which should, he reckons, help the company compete against those bigger rivals in the web advertising space. Quite how that merger will work, and which brands will survive and which will fall, all remains to be seen.

Hey, remember how Yahoo was an original pioneer in streaming music? Launch, anybody? Ah, those were the days.



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