Verizon phones in
Embattled CEO Mayer says she expects to stay
its order for Yahoo, offering $4.83 billion for the publicly traded company. Embattled CEO Marissa Mayer says she expects to stay with the company.
SAN FRANCISCO — Yahoo Inc.’s days as a publicly traded company will soon be over, but under Verizon, its brand will get another chance.
The Sunnyvale, Calif., internet company, once a key guide to the World Wide Web, announced Monday that telecommunications giant Verizon Communications Inc. will buy its core assets for $4.83 billion and continue to operate them under the Yahoo name.
Shares of both companies slid Monday after the deal was announced. Yahoo stock fell 2.7 percent to $38.32. Verizon stock fell 0.4 percent to $55.87.
The sale comes after a five-month bidding process that saw interest from media groups such as the Daily Mail and IAC, internet companies such as Google and Microsoft and private equity firms TPG and Bain Capital.
Verizon, the nation’s largest wireless carrier, was the clear front-runner, having snapped up the remains of AOL last year for $4.4 billion to expand its digital portfolio.
The deal — under which Yahoo will part with its email service; websites dedicated to news, finance and sports; advertising tools; real estate; and some patents — is expected to close in the first quarter of 2017. The sale does not include the company’s cash, its shares in Alibaba Group, its shares in Yahoo Japan or its noncore patents. These assets are to remain with Yahoo, and the company will change its name and become a registered, publicly traded investment company once the deal is closed.
Yahoo’s websites are to be integrated with AOL, but AOL spokeswoman Caroline Campbell confirmed that “Yahoo brands (such as Yahoo Finance and Yahoo Sports) will not go away.” Instead, they will exist alongside AOL’s stand-alone brands such as The Huffington Post, Tech-Crunch and Engadget.
The deal is a far cry from the $45 billion Microsoft offered in 2008 — which Yahoo famously rebuked.
The deal had been expected to end the four-year tenure of Yahoo CEO Marissa Mayer, but she said early Monday that she expects to stay with the company.
“I love Yahoo, and I believe in all of you,” Mayer said in a statement. “It’s important to me to see Yahoo into its next chapter.”
Yahoo’s troubles began well before Mayer took the reins.
The company churned through five CEOs in six years, unable to decide if it was a media company or a technology company.
Mayer’s acquisitions, including $1.1 billion paid for Tumblr, have been a bust. Her turnaround strategies haven’t improved the company’s revenue decline. And her big spending on media personalities such as Katie Couric hasn’t drawn viewers as hoped.
By buying Yahoo, Verizon gets “high-quality web content” and the large advertising revenue stream that comes with it, said Laura Martin, internet analyst at Needham & Co. The deal also boosts Verizon’s sizable trove of user data.