Verizon to acquire Yahoo for $4.8 billion
Yahoo, the front door to the web for an early generation of internet users, reaches the end of the line as an independent company with its agreement to sell its operations to Verizon.
SAN FRANCISCO — Yahoo was the front door to the web for an early generation of internet users, and its services still attract 1 billion visitors a month.
But the internet is an unforgiving place for yesterday’s great idea, and on Sunday, Yahoo reached the end of the line as an independent company.
The board of the Silicon Valley company agreed to sell Yahoo’s core internet operations and land holdings to Verizon for $4.8 billion, according to a person briefed on the matter, who was not authorized to speak about the deal before the planned announcement Monday.
After the sale, Yahoo shareholders will be left with about $41 billion in investments in the Chinese e-commerce company Alibaba, as well as Yahoo Japan and a small portfolio of patents.
That’s a pittance compared with Yahoo’s peak value of more than $125 billion, reached in January 2000.
Verizon and Yahoo declined to comment about the deal.
Founded in 1994, Yahoo was one of the last independently operated pioneers of the web. Many of those groundbreaking companies, like the maker of the web browser Netscape, never made it to the end of the first dot-com boom.
But Yahoo, despite constant management turmoil, kept growing. Started as a directory of websites, the company was soon doing much more, offering searches, email, shopping and news. Those services, which
were free to consumers, were supported by advertising displayed on its various pages.
For a long time, the model worked. It seemed like every company in America — and across much of the world — wanted to reach people using the new medium, and ad revenue poured in to Yahoo.
In the end, the company was done in by Google and Facebook, two younger behemoths that figured out that survival was a continuous process of reinvention and staying ahead of the next big thing.
Yahoo, which flirted with buying both companies in their infancy, watched its fortunes sink as users moved on to apps and social networks.
Verizon, one of the nation’s biggest telecommunications companies, plans to combine Yahoo’s operations with AOL, a longtime Yahoo competitor acquired by Verizon last year. The idea is to use Yahoo’s vast array of content and its advertising technology to offer more robust services to Verizon customers and advertisers.
Bloomberg first reported the price of the Verizon deal.
Marissa Mayer, who was hired as Yahoo’s chief executive four years ago but failed to turn around the company, is not expected to stay after the deal closes. But she is due to receive severance worth about $57 million, according to Equilar, a compensation research firm.
All told, she will have received cash and stock compensation worth about $218 million during her time at Yahoo, according to Equilar’s calculations.