Yahoo Falls to Verizon

Founded in a trailer by two Stanford grads. in 1994, and originally called “Jerry and David’s guide to the World Wide Web”,  Yahoo failed to develop its search technology and failed to capitalize on the social media and mobile revolutions.

It’s just over 12 months since Verizon acquired AOL which included established brands such as TechCrunch, Engadget and The Huffington Post, Verizon is now set to acquire Yahoo’s content and advertising assets for $4.83 billion in an all-cash deal.

Chartoftheday YAHOO

Today’s deal further supports Verizon’s reach in the digital world. According to Yahoo metrics their online brands reach a global audience of more than 1 billion users each month. Clearly Verizon plans to monetize those 1 billion users thanks to the online advertising technology which both AOL and Yahoo have developed.

Hopefully, AOL and Yahoo will bring growth to Verizon, whose core business is maturing and has been struggling to find growth. Verizon now controls two of the largest online content networks, along with the advertising technology and expertise to successfully monetize those networks.

So why did Yahoo sell? Despite making 114 acquisitions Yahoo, the Internet portal giant, has been struggling to find a successful strategy against competitors in three key areas; search, social media and video. Yahoo is basically giving up, selling itself to Verizon for a fraction of its valuation at the start of the millennium.

The New York Times|Source: Reuters (stock price)

In an email to staff, Yahoo CEO, Ms Mayer wrote, “We set out to transform this company — and we’ve made incredible progress. We counteracted many of the tectonic shifts of declining legacy businesses, and built a Yahoo that is unequivocally stronger, nimbler and more modern,”

If Ms Mayer isn’t retained by Verizon, she will receive severance of around $57 million. Which would take her total compensation from Yahoo to $218 million, according to compensation research firm Equilar.

The sale, which is yet to be approved by Yahoo shareholders, does not include Yahoo’s cash and its non-core patents, which it is trying to sell separately.

First published by Adrian G Stewart at OOKII.Company

Adrian G Stewart

Adrian G Stewart

About adriangstewart

Senior executive with expert knowledge of all aspects of strategic marketing and a track record of creating sustainable competitive advantage. International management and leadership experience in both B2B and B2C organizations. Specialties:Strategic marketing management including; new product development, product life cycle management, business relationship management, market segmentation, marketing information systems, e-commerce and social media marketing.
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