July 26, 2016
Yesterday, only a few days after Mastercard and Visa made major strategic moves affecting payments, Verizon acquired the operating business of Yahoo! Inc. for $4.83 billion in cash. The deal did not include Yahoo’s 15 percent stake in Alibaba, the largest e-commerce company in the world by sales, which, as of the end of Q1 2016, was estimated to be worth $28 billion. Verizon nets Yahoo’s popular email and search services; content sites Yahoo Finance, Yahoo Sports, Flickr, Tumblr and Fantasy Sports; along with 600 million active registered users. When combined with the assets of AOL, which the telecom giant acquired last year for $4.4 billion, Verizon said it will have created a mobile media technology company reaching more than one billion users worldwide.
“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers,” said Lowell McAdam, Verizon’s chairman and CEO. “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.”
Verizon will retain the Yahoo! brand while the original company will rebrand as an investment company, retaining the other assets including the Alibaba stake.