Updated 7/25: It’s official: Verizon reached a deal to acquire Yahoo on Monday for $4.83 billion in cash. The deal is pending regulatory and board approval.
Per several sources on Friday, Verizon is close to securing a deal for Yahoo’s core Internet business.
Bloomberg and CNBC both published reported Friday morning naming Verizon the “frontrunner”, with Re/code adding additional color in the long drawn-out saga of Yahoo’s future. The announcement on Verizon buying Yahoo could come as soon as early next week. As TechCrunch notes, Verizon reports quarterly earnings on Tuesday the 26th, which would make the timing of this decision logical.
All three reports on Friday place Yahoo’s estimated valuation at $5 billion, slightly more than what Verizon paid for AOL last year. Verizon would be acquiring Yahoo’s main Internet business—though, not all of Yahoo’s assets—as the company has chosen a reverse spin-off in order to save itself from tax penalties following the Alibaba IPO.
Admittedly, I was against AOL and Yahoo joining forces years ago—but, this was back when they would combine as independent agents. Under Verizon, the pair has capital & resources, and potentially an organizational structure to revive both business units.
Verizon Buying Yahoo: What Would They Get?
Aside for the Yahoo name & whatever cachet remains therein, the company owns substantial real estate and IP. They also have experienced media sales and leadership to offer (though, there will likely be some additional layoffs should this acquisition occur).
The company has considerable media assets for Verizon to be interested in. Yahoo owns popular microblogging platform Tumblr, which just launched live video, and one of the most popular fantasy sports portals in existence. The company also was the first to completely live-stream an NFL game last season.
While Yahoo’s search business has seen better days, they have signed a new search pact with Google, which does provide a stable monthly revenue stream. The portal’s own properties show significant display and video impressions as well, although much of this has moved to programmatic distribution in later years.