Verizon Buys Yahoo for $5 Billion

Verizon buys core assets of venerable search engine sold, but Yahoo retains stake in Yahoo! Japan and AliBaba

Yahoo Classified Ad (Sold to Verizon)

After years of speculation over its future, Yahoo! the long-established search engine and web directory will be sold to Verizon Wireless for $4.8 billion (£3.7 billion). The sale of its core business will see the Sunnydale company retain a stake in Yahoo Japan and AliBaba. The figure, referred to as “chump change” by some commentators sees the sale of its real estate, though not its intellectual property.

Besides the search engine and directory that made the company top dog, it is anticipated that Tumblr and Flickr would be sold separately. In 2014, Tim Armstrong, AOL’s CEO at the time, proposed an AOL-Yahoo takeover bid to Marissa Mayer. Ms. Mayer turned down the approach, back when both AOL and Yahoo had more market share.

Two years on, AOL had been sold to Verizon, including the AOL-owned Huffington Post. The company has had a proud history with news and sports content and has hired the highly renowned Katie Couric. Both AOL and Yahoo are renowned for its content which sees the two companies as a good match for monetisation. Following Verizon’s acquisition, it is not yet known as to whether or not they wish to keep the Yahoo name.

Yahoo aimed to add an advertising model to Tumblr, but this came to naught. The search engine tried the same with Flickr. This had been more successful with free accounts being ad-supported (with premium accounts, the adverts are turned off).

Verizon’s acquisition has ended years of speculation for the beleaguered search engine. In 2005, 2006, 2007, and 2008, there had been discussions with Microsoft over a possible merger. Earlier this year, it had been the subject of potential takeover bids by Twitter and the Daily Mail and General Trust.

Who are Verizon?

Verizon is no upstart company. In fact, their existence predates the formation of Yahoo and Google having spun off from the Bell Telephone Company in 1983. On the 07 October that year, they were formed as Bell Atlantic. This was after AT&T Corporation was forced to relinquish control of its Bell System by the Justice Department of the United States, which saw the creation of seven Baby Bells.

After acquiring GTE in June 2000, Bell Atlantic and GTE became Verizon. The name is a portmanteau of the first four letters of “veritas” (Latin for truth) and the last three letters of “horizon”.

Net66, 25 July 2016.