It has finally happened. Yahoo, Inc has been sold after a long and drawn-out process.
Verizon will pay $4.83 billion in cash for Yahoo’s core internet business, which includes Yahoo Mail, Fantasy Sports, photo storage site Flickr and Yahoo search, as well as the company’s advertising technology.
Verizon plans to merge Yahoo with AOL which it purchased last year for $4.4 billion. Verizon executive Marni Walden will be in charge of both AOL and Yahoo.
Verizon Chairman and CEO Lowell McAdam, issued this statement:
“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators, and advertisers. 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.”
According to the Verizon press release, the sale does not include Yahoo’s cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents (called the Excalibur portfolio). These assets will continue to be held by Yahoo, which will change its name at closing and become a registered, publicly traded investment company.
The End of the Mayer Dynasty?
Marissa Mayer, Yahoo’s chief executive officer, has faced a massive amount of criticism over her tenure. Both the media and investors questioned her ability to turn the iconic company around. Those voices became louder after Mayer spearheaded purchases of smaller startups as a part of her talent acquisition strategy.
She purchased a total of 53 companies during her tenure. Most of which were shut down soon after they were purchased. In March 2016 Fortune named Mayer as one of the world’s most disappointing leaders.
In a Tumblr blogpost, Mayer said she planned to stay at Yahoo. “For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter”.
In May 2016, it was revealed that Mayer would receive $55 million if she is terminated without cause within one year of Yahoo’s sale. Verizon’s Marni Walden told CNBC the new leadership team had yet to be determined.
What happens to Flickr?
The future of the photo sharing site is still uncertain. Flickr was bought by Yahoo in 2005. Bank then, it was a revolutionary way to share and store photos. The site attracted armatures and professionals alike. But with the rise of Instagram for photos, and Dropbox for storage, Flickr’s appeal has diminished over the years.
By the time Yahoo realized that it was not giving Flickr the attention it needed, it was too late. Yahoo attempted to improve Flickr by adding functional mobile apps and terabyte storage. But their attempt to compete with Instagram alienated many of the professional photographers that utilized the site.
“Flickr is one of the world’s largest photo sharing communities and a platform for millions of people who have collectively uploaded more than 12.4bn photos,” said a Yahoo spokesman. “We remain focused on creating a destination for this community of photographers and people who love photos.”
The deal is subject to customary closing conditions, approval by Yahoo’s shareholders, and regulatory approvals, and is expected to close in Q1 of 2017.