Verizon buys Yahoo in $4.8B deal

By Barry Eitel

SAN FRANCISCO (AA) – Verizon announced Monday that it has agreed to acquire Internet pioneer Yahoo in a $4.83 billion deal.

The wireless carrier will acquire Yahoo’s online brands used by 1 billion people around the world each month, as well as Yahoo’s email service, which has 225 million monthly active users. This includes Yahoo’s search, news and advertising products, plus the popular Tumblr blogging service Yahoo bought in 2013.

Verizon will not acquire Yahoo’s store of cash nor its sizable stakes in two Asian companies – the giant Chinese online retailer Alibaba and profitable web portal Yahoo Japan. Those three entities will be spun off to form a new investment company, with a to-be-decided name different from Yahoo, after the close of the deal that is expected to be completed by early 2017.

Verizon will integrate Yahoo, an Internet trailblazer founded in 1995, with AOL, another early Web innovator. The telecommunications giant bought AOL last year for $4.4 billion.

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

Marissa Mayer, Yahoo’s CEO since 2012, announced she would be staying on with the company under Verizon’s leadership, but it wasn’t clear exactly what her new position would be.

“It is up to us to make Yahoo’s final quarters as an independent company count,” Mayer wrote Monday in a Tumblr post aimed at her employees. “Yahoo is a company that changed the world. Now, we will continue to, with even greater scale, in combination with Verizon and AOL.”