Verizon Is The One Most Likely To Acquire Yahoo!
Reports have indicated that the biggest wireless carrier in America will be the likely buyer of Yahoo! Inc. It is also quite possible that the completion of the acquisition will be made official in the next few days. Of course, the deal will have some significant repercussions. Chief among them will be the end of the Marissa Mayer’s reign as the chief executive officer of Yahoo. During her time as CEO of Yahoo, Mayer had worked to rejuvenate the ailing Yahoo brand, but her tenure was far from being controversy free.
Once the deal is completed, the Big Red will certainly look forward to adding the former Internet giant’s resources as well as its still formidable user base, which numbers in the millions despite Yahoo’s struggles in recent years, to Verizon Wireless’ ever growing collection of media properties. According to inside sources, the acquisition will likely be worth around $5 billion for the core web business divisions of Yahoo. It bears noting that the deal will not include Yahoo’s patents nor its real estate assets, at least for now. Sources have shared that the non-core sale of Yahoo’s intellectual property assets will be done in a separate deal, and it may be a while (probably a month’s time) before that happens. Such sale could fetch hundreds of millions of dollars, according to sources.
The bidding process for Yahoo has taken several months. It started earlier this year when Mayer revealed that Yahoo was beginning to look for strategic alternatives in re-inventing itself. Such alternatives included selling its core web assets, which once made Yahoo a powerhouse name in the Internet. Participating in the bidding process were some big, familiar names such as major US wireless carrier AT&T, Vector Capital Management and TPG.
Just as the wireless industry is reaching maturity, industry leader Verizon Wireless has been actively acquiring Internet and advertising tech firms here and there, including AOL. Many industry watchers seem to think that the Big Red is keen to take on Alphabet (the parent company of Google) and Facebook, especially in the area of mobile ads. In that regard, the acquisition of Yahoo would make for a wise decision. Despite Yahoo’s woes, it still has millions of users, plus an impressive collection of Internet brands that include Tumblr, Flickr, Yahoo Finance, and Yahoo Sports, not to mention digital advertising technology like BrightRoll and Flurry. With both AOL and Yahoo under its belt, Verizon Wireless now has a decent chance of giving Google or Facebook a run for their money.
As for Mayer, despite her best efforts, she never really managed to achieve a definite turnaround for Yahoo after three years as a CEO. There was a plan to spin off Yahoo’s stake in China’s Alibaba Group Holding Ltd, with the purpose of reducing the tax impact for investing partners. As the biggest ecommerce giant in all of China, Alibaba turned out to be the most valuable piece of Yahoo, and investors were exploring angles in which they can take advantage of some of those gains. However, the transaction’s tax status never gained the approval it needed from United States regulators, Yahoo was compelled to ditch the deal.