Verizon has agreed to pay $4.83 billion for Yahoo (YHOO, Tech30), the companies said before markets opened Monday.
The sale completes Yahoo's
evolution from influential search pioneer and web portal juggernaut to, in the
end, a once-dominant brand that lost its way.
Parties as diverse as Warren
Buffett and The Daily Mail were interested in buying Yahoo. But after a sale
process that dragged on for months, Verizon (VZ, Tech30), long viewed as the
frontrunner, is walking away with Yahoo's more than one billion monthly active
users.
Current Yahoo shareholders will
keep the company's lucrative investments in Chinese e-commerce giant Alibaba
and Yahoo Japan. They will be spun into a separate, yet-to-be-named, publicly
traded company.
The Verizon deal must be
approved by regulators and is expected to be finalized early next year.
The sale puts an end to
Yahoo's 21-year history as an independent company. Yahoo will now be integrated
with Verizon-owned AOL under Marni Walden, an executive vice president at the
telecom company.
It also ends a turnaround
effort by Marissa Mayer, who joined Yahoo four years ago and promised to
revitalize the company. Verizon and Yahoo did not immediately comment on who
will lead Yahoo once the deal is complete.
It's unclear what Mayer will
do after the deal closes.
"For me personally, I'm
planning to stay," Mayer wrote Monday in a memo to employees posted on
Tumblr. "I love Yahoo, and I believe in all of you. It's important to me
to see Yahoo into its next chapter."
Tim Armstrong, the CEO of
Verizon-owned AOL, said he has "enormous respect for what Yahoo has
accomplished" and that integrating the two former internet powerhouses
will "create a new powerful competitive rival in mobile media, and an
open, scaled alternative offering for advertisers and publishers."
Mayer, like Armstrong,
previously worked at Google (GOOG) before taking over the top spot at Yahoo in
2012. She invested heavily in improving Yahoo's mobile products, expanding its
audience through the acquisition of Tumblr and doubling down on premium media
content. She brought in TV journalist Katie Couric as Yahoo's "global
anchor."
But Mayer struggled to slow
Yahoo's overall ad sales decline.
On a conference call with
shareholders last week after reporting earnings, Mayer made what may have been
her final case to investors and the public that she worked to "create a
better Yahoo."
But the sale price suggests
that Yahoo's glory days ended long ago. In 2008, for example, Microsoft was
willing to pay more than $45 billion for Yahoo, an offer that was rebuffed by
co-founder Jerry Yang.
Yahoo was synonymous with
the Internet itself in the late '90s. But for Verizon, the deal is about more
than just nostalgia. The telecom company has invested in digital content and
advertising in recent years, buying AOL and the Huffington Post.
Credit:CNN
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