VERIZON CLOSES IN
Nears $5B deal to buy Yahoo’s core businesses
Marissa Mayer’s stint at Yahoo may be nearing an end — and it looks like her long friendship with her old Google co-worker, Tim Armstrong could end ugly.
Verizon Communications — whose AOL division is headed by Armstrong — has emerged as the leading bidder for Yahoo’s core internet business as a lengthy auction draws to a close, sources told The Post.
A price tag nearing $5 billion doesn’t include Yahoo’s trove of patents, but it does include the company’s real estate, according to a report by Bloomberg, citing sources familiar with the matter.
The deal could bring Mayer’s troubled, four-year term as chief executive to an end, if Yahoo is folded into AOL’s suite of online publishing and advertising properties that includes the Huffington Post and TechCrunch.
After closing a deal last year to sell AOL to Verizon for $4.4 billion, Armstrong is angling for control of media properties like Yahoo Sports and Yahoo Finance, potentially creating a strong No. 3 web advertiser behind Google and Facebook.
Mayer could end up getting cast aside.
A Yahoo sale could be announced early next week, although talks were still fluid, insiders told The Post.
“It’s not over yet,” according to one source close to the situation. But Armstrong and his boss, Verizon [CEO] Lowell McAdam, “continue to be [the] front-runner.”
Still, a second source cautioned, there has been “some pressure internally at Verizon” by investors who have resisted a Yahoo deal.
“They’re asking, ‘ Why are we spending so much money on Yahoo when AOL didn’t work out so well?’” according to the source.
At this late stage, the other key contender appears to be Dan Gilbert, co-founder of Quicken Loans, whose bid has been backed by billionaire Warren Buffett’s Berkshire Hathaway.
Gilbert, a Midwestern tycoon whose ideas for Yahoo aren’t totally clear, “can af- ford to pay whatever it takes to win,” according to one investor.
Officials at Verizon didn’t comment, and Gilbert couldn’t be reached.
“In order to maintain the integrity of the process, we’re not going to comment until we have a definitive agreement to announce,” a Yahoo spokeswoman said Friday.
Speculation about a possible Yahoo-AOL merger heated up two years ago, when Armstrong and Mayer were spotted sharing drinks at Allen & Co.’s annual “summer camp for billionaires” in Sun Valley, Idaho.
But Mayer reportedly shunned an overture from the then-independent AOL to merge the two companies, leaving Armstrong’s hobbled Web portal to pursue his tie-up with Verizon.
While analysts debate the wisdom of Verizon’s AOL purchase, Yahoo’s results have steadily deteriorated, with second-quarter sales off 19 percent and its 2013 Tumblr acquisition losing twothirds of its value.
Mayer wasn’t invited to this year’s Allen & Co. shindig, held earlier this month.
Armstrong and McAdam, who have retained the investment bank as an adviser in Yahoo negotiations, were spotted strolling the grounds in Sun Valley.