Wednesday , 26 October 2016
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Why Is Verizon Buying Yahoo for $4.8 Billion?

Verizon’s $4.83 billion acquisition of Yahoo, announced today, will create “a new rival in mobile media technology,” according to the company. The deal comes just over a year after Verizon’s purchase of AOL for $4.4 billion.

By adding Yahoo to its fold, Verizon gains a digital media property with more than 1 billion monthly active users, along with significant new advertising opportunities. The acquisition is aimed at fueling new growth as the mobile services market continues to shift dramatically.

Expected to be finalized early next year, the all-cash deal will expand Verizon’s portfolio of digital media brands with the addition of Yahoo’s online news, finance and sports properties. Verizon will also gain Yahoo’s email service, which boasts 225 million users, and several of the company’s advertising technology assets, including Brightroll, Flurry and Gemini.

Opportunities for ‘Transformation’

“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers,” Verizon chairman and CEO Lowell McAdam said in a statement. “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.”

For Yahoo, meanwhile, the deal adds new distribution opportunities for its digital content and promises to boost the value of its properties for shareholders. It will also help to separate out Yahoo’s Asian assets, including shares in Alibaba Group Holdings and Yahoo Japan that are not included in the transaction.

The deal “presents exciting opportunities to accelerate Yahoo’s transformation,” Yahoo CEO Marissa Mayer wrote in an email to employees posted on the company’s Tumblr blog. “Among the many entities that showed interest in Yahoo, Verizon believed most in the immense value we?EU?ve created, and in what a combination could bring our users, our advertisers, and our…