Verizon Acquires Yahoo for $4.8 Billion

Verizon acquires Yahoo

After months of negotiations and multiple rounds of meetings, finally, Verizon has bought Yahoo!. According to WSJ, Verizon has acquired Yahoo! for just $4.8 billion. Yahoo’s board agrees to accept the terms and conditions of Verizon. Exact terms and conditions are not yet known, the deal includes Yahoo’s core internet business along with some real estate.

It is worth to note that patents are not a part of the deal.

While the price is not very much surprising, but it shows how Yahoo! fell. Once this company was worth more than $125 billion when dot-com boom was there. But, it couldn’t manage its success and lost market to Google, Facebook, and others.

While the deal is not so big considering the Yahoo! is the part, it is the second largest deal on Internet space after Microsoft had acquired LinkedIn deal

Marissa Mayer failed measurably in bringing back Yahoo!’s lost glory. Yahoo struggled a lot in past few years. Marissa Mayer acquired various startups, interesting apps and few big companies including Tumblr. But, nothing helped Yahoo! to get something beneficial.

For the past few quarters, Yahoo! was losing money. In Q2 2016, Yahoo!’s revenue dropped by 20% from a prior year. The biggest disappointment came in the form of Tumblr which lost nearly 65%. Nothing was working for Yahoo!.

Is Verizon a right buyer?

While many of you already know Verizon, you may ask if Verizon can better use of Yahoo!. Verizon is the largest telecom and networking company in the US, but it is aiming big in the online advertising market. It already acquired AOL in 2015 to strengthen its grip in this market. With Yahoo!’s acquisition, it will get the better grip and more exposure in this market. While this market is being lead by Google and Facebook, Verizon has already done its homework before actively pushing its core strategies in this market. Yahoo! has few big Internet properties including  Flickr, Tumblr, and many others. Verizon still has a chance to create its impact and dominate the compete in digital space dominated by two internet giants.

Now it will be interesting to see how Yahoo! performs under new buyer. Yahoo!’s Verizon deal is the first step toward unwinding Yahoo. Next will be Yahoo!’s patents which were not the part of this deal. Yahoo is selling Patents in a separate auction which is expected to earn more than $! billion.

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