The strategy of America’s largest telecom operator is to strengthen its foothold in the digital media business and grow its content for smartphone and other device users.
AT&T, one of the main rivals of Verizon in the U.S. wireless market, was also in the race to purchase Yahoo and its digital business. A statement from Yahoo did not mention anything about the future of its CEO Marissa Mayer. She is expected to step down after closing the deal.
Yahoo has a global audience of more than 1 billion monthly active users — including 600 million monthly mobile users through its search, communications and digital content products.
Verizon-Yahoo deal in detail
# Verizon to get Yahoo search, mail and instant messaging, ad technology and land holdings
# Yahoo was valued at over $125 billion in January 2,000
# Yahoo will be left with $41 billion investment in Alibaba and Yahoo Japan
# Yahoo Mail struggles
# Messenger is almost nowhere
# Verizon ads photo-sharing website Flickr, Yahoo Sports, Yahoo News
# Verizon ads slowly growing social networking website Tumblr
# Verizon earlier bought AOL
Verizon earlier acquired digital media company AOL.com and its web products as part of its strategy of providing a cross-screen connection for consumers, creators and advertisers. Web products of AOL include The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com.
Verizon CEO Lowell McAdam said: “The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”
Yahoo will be integrated with AOL under Marni Walden, president of the Product Innovation and New Businesses organization at Verizon.
Combined, AOL and Yahoo will have more than 25 brands in its portfolio for continued investment and growth. Yahoo’s key assets include content brands in major categories including finance, news and sports, as well as 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.
Yahoo’s cash, its share in Alibaba Group, its share in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents called the Excalibur portfolio are not part of the deal with Verizon, said Yahoo.
Yahoo will change its name and become a publicly traded investment company.