Verizon Communications is all set to buy out Yahoo for a deal valued at $6.5 billion. The deal between Verizon and Yahoo has been sealed, however the official announcement is expected to come on Today. The announcement will come before the start of New York trading hours, the source added. The deal will end months of uncertainty about Yahoo’s future after the company announced plans to review strategic alternatives in February.
Pastyears Internet search engine Giant Yahoo is bought out by US telecommunications giant Verizon in a deal worth $6.5 billion. The deal sees Verizon pay $US4.83 billion ($6.5 billion) for Yahoo’s core business, excluding its successful Asian ventures – a 15 per cent stake in the Chinese online marketplace Alibaba and its 35 per cent holding in Yahoo Japan – as well as some patents. The value of those remaining assets is estimated at around $US40 billion ($55 billion). Verizon is expected to combine the business with the internet firm AOL, which it bought last year for $US4.4 billion ($5.9 billion). Source
Marissa Mayer failed to revive Yahoo
Yahoo had hired former Google executive Marissa Mayer as its CEO four years back, who has been unable to turn the company around.
Yahoo will sell most of its internet business which includes YahooMail, Yahoo New, Yahoo Finance, and Sports websites. The Yahoo advertising tools will also be sold off under the deal, according to reports. Yahoo after the sale won’t be an operating company, and will instead function as a stake-holding company with a 35.5 per cent stake in Yahoo Japan and 15 per cent interest in China’s e-commerce company Alibaba Group Holding Ltd.
The deal will also likely mark the end of Marissa Mayer’s four-year reign as Yahoo CEO Marissa Mayer, where she failed to make a turn around for the company.
Who is New Star after Yahoo-Verizon deal?
With the Yahoo-Verizon deal Monday, AOL chief Tim Armstrong has re-emerged as a figure who may be key in the effort to shape a new internet strategy.
Armstrong, who remained head of AOL when it was acquired last year by Verizon, is now set to inherit another faded internet star.
In the statement announcing the $4.8 billion acquisition of Yahoo’s core internet assets, Verizon said the online operations would be “integrated with AOL.”
Armstrong said in the statement, “Our mission at AOL is to build brands people love, and we will continue to invest in and grow them.”
How Yahoo-Verizon deal may effect India?
Verizon’s acquisition of Yahoo in a $4.83-billion deal is likely to have an impact on the latter’s research & development (R&D) operations in Bengaluru and could set the stage for the further scaling up of its resources. Yahoo started its R&D operations in Bengaluru around 13 years ago and this had become its second largest centre globally after the US. The centre has an estimated headcount of around 2,000.
History of Yahoo
Started in 1994 by Stanford graduate students Jerry Yang and David Filo, Yahoo in its early years was the destination of choice for many making their first forays onto the World Wide Web.
Yahoo! was started at Stanford University. It was founded in January 1994 by Jerry Yang and David Filo, who were Electrical Engineering graduate students when they created a website named “Jerry and David’s Guide to the World Wide Web”. The Guide was a directory of other websites, organized in a hierarchy, as opposed to a searchable index of pages. In April 1994, Jerry and David’s Guide to the World Wide Web was renamed “Yahoo!”.The yahoo.com domain was created on January 18, 1995.
Yahoo! grew rapidly throughout the 1990s and diversified into a web portal, followed by numerous high-profile acquisitions. The company’s stock price skyrocketed during the dot-com bubble and closed at an all-time high of US$118.75 in 2000; however, after the dot-com bubble burst, it reached an all-time low of US$8.11 in 2001.Yahoo! formally rejected an acquisition bid from the Microsoft Corporation in 2008. In early 2012, the largest layoff in Yahoo!’s history was completed and 2,000 employees (14 percent of the workforce) lost their jobs.
How did they get the name Yahoo?
However, Filo and Yang insist they selected the name because they liked the general definition of a yahoo – “rude, unsophisticated, uncouth.” Yahoo! itself first resided on Yang’s student workstation, “Akebono,” while the software was lodged on Filo’s computer, “Konishiki” – both named after legendary sumo wrestlers.