Yahoo CEO Mayer resigns as $4.5B Verizon deal closes
Verizon Communications Inc. is getting Yahoo Inc.’ s Internet services, giving the telecommunications giant access to hundreds of millions of users, while closing a chapter on the iconic web portal as a stand-alone business after coming under sharp criticism in recent years.
The companies officially closed the US$ 4.5- billion agreement Tuesday, following Yahoo shareholder approval last week. Yahoo properties including Sports and Finance will become part of a new Verizon unit called Oath, which is home to brands like AOL, TechCrunch and the Huffington Post. Oath will be overseen by former AOL chief executive Tim Armstrong, while Yahoo CEO Marissa Mayer, 42, is stepping down.
Verizon — which acquired AOL two years ago and started an online video application — is building what it hopes will become a leading digital service that supplements its core business of helping consumers send and receive information on their devices or watch television channels. While the agreement was announced last July, the deal itself was in jeopardy after Yahoo disclosed two massive security hacks that exposed user accounts and threatened its trust with consumers, eventually slashing the deal’s price by US$350 million.
“The close of this transaction represents a critical step in growing the global scale needed for our digital media company,” said Marni Walden, Verizon president of media and telematics.
What remains of Yahoo after the sale, includes an approximately 15 per cent equity stake in China’s Alibaba Group Holding Ltd., about 36 per cent in Yahoo Japan Corp., cash and marketable debt securities, certain minority investments and Excalibur IP, which owns some patent assets. That collection of Yahoo assets will be renamed Altaba Inc. Thomas McInerney, who will remain on the board, becomes Altaba’s CEO.
During a presentation last month, Armstrong, who joined Verizon with the AOL deal, said the company will have about 1.3 billion customers. He sought to position the new entity as an alternative to online consumer behemoths that include Alphabet Inc.’ s Google and Facebook Inc. Verizon has now spent more than US$9 billion on the combined assets, including AOL.
Still, there will be trimming. The combined businesses are expected to shed about 2,100 jobs with the close of the deal, a person familiar with the matter said last week. The cuts — about 15 per cent of the combined workforce — will be mostly for duplicate jobs, so engineering positions are less likely to be affected, the person said.
For Yahoo, the move ends the Web pioneer’s days as an independent company after helping introduce a generation of users to the Internet, beginning in the 1990s. Its success came under pressure with rise of Google and other web properties that attracted consumers around the world — and the advertising dollars that came with them.
“While reaching this moment has certainly been a long road travelled, it marks the end of an era for Yahoo, as well as the beginning of a new chapter — it’s an emotional time for all of us,” Mayer wrote on her blog.
Mayer arrived in July 2012 from Google to great fanfare. She pushed Yahoo into more mobile services, started new video content services and tried to attract better talent to improve products. But that never translated into much sales growth — and early last year the company began entertaining offers that led to the Verizon deal.
Mayer was the fourthhighest- paid U. S. woman executive in 2016 with US$32.8 million for the year she orchestrated a sale of the firm to Verizon. The board withheld her 2016 bonus after it was revealed that hacks of the web portal had exposed hundreds of millions of users’ personal information.