Last updated on March 23rd, 2018 at 07:42 am
Verizon is a technology company who has been getting closer and closer to making a great deal with Yahoo. They are intending on purchasing Yahoo’s major business. They plan to purchase it for approximately five billion dollars. Those who are working closely with these talks have recently confirmed this.
Verizon have been thinking about this for quite some time. Some of the internet services they are intending on purchasing include AOL. They purchased AOL in 2015 for about four point four billion dollars.
Why Verizon Want to Buy Yahoo?
It was only logical for Verizon to make such a purchase. This is because their business is not much different to Yahoo. The idea of the deal is to combine all of the advertising technology services. Verizon intend to turn themselves into an alternative to Google and Facebook. Both Google and Facebook also come with a range of media services.
Another competitive bidder recently told us:
“If Verizon’s bid gets as high as Facebook and Google, then they will certainly do very well. This is because they are the best option for Yahoo”.
A board member at Yahoo named Tom McInerney, has also confirmed that they were looking for a deal that would be simple to do. Another worker at Yahoo said:
“There is nothing to be concerned about with Verizon. Their financial situation is excellent. They are happy to answer any integration questions people may have. There will be no difficulty in doing this”.
Verizon were very happy to pay more than what Yahoo had already set down. This was paid for during the last week. However, a few board members at Verizon were a little concerned about the money that they were paying. Their concerns were also about other costs that would come into the deal. One cost was the fact that Mozilla, their search engine partner, was provided with fantastic benefits. Their policies for termination were also expensive. Especially when it came to the deal that Marissa Mayer, Yahoo’s CEO made.
In recent times, Verizon have gotten well ahead of Yahoo. All sports websites, e-email services, and news services Yahoo have will be sold to Verizon. Not only these services, but so will Yahoo’s marketing tools. Yahoo’s marketing tools have been experiencing a lot of pressure from other shareholders. Other shareholders have been getting frustrated with Yahoo’s lack of revenue over the last eight years or so.
Marissa Mayer will probably resign from her four-year CEO position at Yahoo. She was once an executive at Google. Her attempts to make changes to the Sunnyvale, Calif, company unfortunately failed.
Once the sale has been finalized, Yahoo will continue on as a holding business. But only for their two stakes which are based in China as China’s e-commerce leader. These leaders are known as Yahoo Japan and the Alibaba Group. These are where most of Yahoo’s marketing money comes from.
Unfortunately, Yahoo chose not to make any comments on the given reports. Nor have anyone at Verizon.
Tim Armstrong is on the Verizon side of AOL. He was a spokesperson for Mayer. He has confirmed that when the deal has been finalized, the turn would be somewhat ironic. Mayer and Armstrong were in the same team whilst working at Google some time ago. However, what is more important, only a couple of years ago, Mayer decided to reject Tim’s idea of combing both businesses. Verizon took AOL. This is what is now bringing Yahoo down.
However, we all know that the snake will eventually eat itself. Not only that, but Tim Armstrong is a fantastic sales person.
Far Behind Google, Facebook
You can be sure there will be some difficulties with the inclusion of Yahoo. Not too long ago, it was discovered that they experienced a quarter net loss. They lost four hundred and thirty nine point nine million dollars. This is what Tumblr is valued. Social media and microblogging services have since been added since 2013. This has costed them one point one billion dollars.
Whilst Verizon have brought Yahoo and AOL, it does not mean they will ever get ahead of Facebook or Google. An eMarketer recently stated that: “Yahoo is likely to gain two point thirty two billion dollars in net U.S. digital ad sales. AOL on the other hand is likely to gain one point three billion dollars throughout 2016”. “Google and Facebook are sure to earn anywhere from ten point three billion dollars through to twenty four point sixty three billion dollars by the end of this year alone”.
Managers of Yahoo have confirmed that the final part of the business will keep Yahoo Japan and Alibaba stakes “indefinitely”. Each of these stakes is worth around forty billion dollars. This is based on market capitalizations. With this in mind Yahoo once had a market value of around thirty seven point four billion dollars at end of business on Friday.
It has been decided that Yahoo will keep on going as an independent business. This will keep going until the deal has had their regulatory and shareholders approved. The business will probably close down forever during the early half of 2017. Yahoo will probably have a new name and turn into a public trade investment business.
The Rivals of Verizon
Verizon have got through their difficult rival bidders. One of these bidders were AT & T Inc (T.N). A founder named Dan Gilbert leads this Quicken Loans business. Warren Buffett is a billionaire who assists Dan in leading this business. The other bidder was a business called TPG Capital Management LP (TPG.UL). This business was brought by the firm: Vector Capital and Sycamore Partners.
Final Thought (Short History of Yahoo)