Verizon has announced their latest deal, which was reached over the past weekend, to purchase Yahoo for close to $5 billion or $4.83 billion in cash. Verizon has been seeking to build an array of digital companies or media businesses to compete for users and advertising against more popular companies like Google and Facebook. This deal to buy Yahoo’s core internet business will unite the two titans of the early internet, AOL and Yahoo, as Verizon also bought AOL last year.
Verizon has a vast amount of information about its customers’ internet use, and they hope this new purchase will help to create an even stronger company; a challenge to Google and Facebook for digital advertising revenue. Tim Armstrong, chief executive of AOL, says the acquisition will strengthen Verizon, give it more scale, and go from serving millions of customers to billions. They plan to keep most of Yahoo’s current products, even their email service or webmail, and invest in making them stronger.
Though the purchase comes with many pros, it still carries some risks as cons. Verizon has little experience in the digital content business and must continue to prove their value in the space. The sale marks the end of the company’s 22-year run as an independent entity. Many senior executives, including chief executive Marissa Mayer will be entitled to large severances if Verizon decides to let them go. Mayer alone would likely receive about $57 million if her role is eradicated.
To learn more about the newly announced deal, and what’s to come, visit here.
