Following several rounds of bidding and rumors this weekend, it was confirmed this morning that Yahoo is being acquired by Verizon for $4.83 billion. In 2015 Verizon acquired AOL for roughly $4.4 billion.
Effectively AOL and Yahoo will be merging, a deal once proposed by AOL’s CEO Tim Armstrong but rejected by Yahoo. Here’s what the combination offers Verizon:
The addition of Yahoo to Verizon and AOL will create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities. Combined, AOL and Yahoo will have more than 25 brands in its portfolio for continued investment and growth. Yahoo’s key assets include market-leading premium content brands in major categories including finance, news and sports, as well as one of the most popular email services globally with approximately 225 million monthly active users. Additional technology assets in the advertising space include Brightroll, a programmatic demand-side platform; Flurry, an independent mobile apps analytics service; and Gemini, a native and search advertising solution.
According to the press materials, the sale “does not include: Yahoo’s cash, our shares in Alibaba Group Holdings or Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents (called the Excalibur portfolio).” When the Verizon deal closes, those assets will trade under a different investment company name.
Yahoo was founded in 1994 and went public two years later in 1996. In February 2008, Microsoft tried unsuccessfully to acquire the company for roughly $45 billion but a year later acquired its search business, which probably marked the beginning of the end for the Sunnyvale-CA company.
Verizon says that “Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.” Although it has not yet been formally announced, Yahoo CEO Marissa Mayer will likely leave the company with a lucrative package.
The challenges of integrating AOL and Yahoo successfully will be substantial. Whether Verizon, a telecom company, can grow (or maintain) the value of the Yahoo-AOL portfolio also very much remains to be seen.
There will be an investor call at 8:30 Eastern. We’ll listen in and update this post with any new information.