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  • Verizon,

  • the big US wireless and landline telecom company,

  • headquartered in New Jersey,

  • a year ago bought one of the 1990's internet pioneers, AOL

  • for 4.4 billion dollars.

  • AOL had developed a digital advertising platform where ads were bought and sold,

  • that was small but growing fast and could turn into a challenger to the online dominance of Google and Facebook.

  • By buying Yahoo for 4.83 billion dollars in cash,

  • Verizon is doubling down on that bet.

  • Yahoo has 600 million monthly users who rely on its search engine

  • or visit its websites like Yahoo Finance and Tumblr.

  • While Verizon has an equity value of 230 billion dollars,

  • it's phone businesses have slowed down,

  • and it wants to get into creating digital content

  • and distributing ads that it can pair with its distribution businesses.

  • Yahoo was one of the first companies to help develop the internet in the 1990s

  • by creating one of the first organization systems for web pages.

  • It's market cap soared over 100 billion dollars during the Dot-Com Boom,

  • and even years later, in 2008,

  • it spurned a near 50 billion dollar acquisition attempt from Microsoft.

  • However, as social networks like Facebook were invented,

  • Google became the dominant search engine,

  • and Steve Jobs designed the iPhone,

  • Yahoo's offerings simply couldn't keep up.

  • In recent years, it has tried turning to acquisitions like Tumblr,

  • but the company seemed to be too far behind.

  • Selling the company is only part of the puzzle for Yahoo.

  • Its stakes in Alibaba and Yahoo Japan are worth over 30 billion dollars.

  • It initially hoped to spin off the Alibaba shares in a new company,

  • but that risked a big tax bill.

  • After the Verizon sale,

  • the remaining Yahoo will have to decide how to dispose of those stakes,

  • without drawing the ire of the IRS.

  • For all its struggles,

  • Yahoo has been a constant source of corporate drama.

  • and even with the sale of its main businesses,

  • that isn't over yet.


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What Verizon sees in Yahoo | Lex

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    Colleen Jao posted on 2016/07/26
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