Verizon Completes Yahoo Buy
Verizon Communications completed its acquisition of Yahoo today.
Yahoo, a pioneer in search advertising that was once eyed by Microsoft as a potential buy, will get folded into Verizon's AOL assets to create a new subsidiary called "Oath." Tim Armstrong, formerly AOL's CEO, will serve as the CEO of Oath. He'll oversee properties such as "HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, BUILD Studios, Yahoo Finance, Yahoo Mail and more," according to Verizon's announcement.
Marissa Mayer, former head of Yahoo during its last five years, has resigned, Verizon's announcement stated. Mayer today offered a retrospective on Yahoo's progress in this blog post.
The deal was valued at $4.48 billion, according to a New York Times story. The final price included a price reduction of $350 million that was attributed to two massive security breaches. The security breaches, involving hundreds of millions of user accounts, were known to Yahoo but were not publicly disclosed, not even initially to Verizon. In March, the U.S. Justice Department charged four people, said to be part of the Russian Federal Security Service, as directing the Yahoo hacks.
Yahoo partly survives as an entity under its new name, "Altaba Inc.," based in New York City, trading under the AABA ticker. It consists of a "15% equity stake in Alibaba Group Holding Ltd.," Yahoo's Chinese subsidiary, along with a "36% equity stake in Yahoo Japan Corporation," plus Excalibur IP LLC assets, according to Yahoo's announcement.
In 2008, Microsoft was said to have offered about $44 billion to buy Yahoo, about 10 times the price paid by Verizon. Microsoft later dropped the offer and began hiring key search personnel from Yahoo, including former Yahoo Dr. Qi Lu, who initially joined Microsoft as head of the Online Services Group. Microsoft also established a search deal with Yahoo in which search-rival Yahoo agreed to use Microsoft's Bing search engine.
Kurt Mackie is senior news producer for 1105 Media's Converge360 group.