Verizon Buys Yahoo Core Business For $4.8b/1.7tr Naira

Oh dear! Yahoo is selling itself and this ends one of the web pioneers’ 22 year reign as an independent company. Speculations have been on for a good part of this year and just last week, the rumors were close to being confirmed but what’s quite surprising is the price tag for its core business of $4.8b/1.7tr Naira because just some years ago, we remember in 2008 when Microsoft offered to buy the internet giant for about $44b/16tr Naira when you use an exchange rate of a dollar to 360 Naira (even though it would have been less than 16tr Naira because the Naira exchanged for a lesser cost against the dollar at the time) and just eight years later, the same company is being sold for a less amount.

The Yahoo board has agreed to sell Yahoo’s core business to Verizon Communications (the second biggest in the world by revenue) for $4.8b after attempts to improve the company’s financial outlook over the years failed.

According to the New York Times, after the sale, Yahoo shareholders will be left with about $41 billion in investments in the Chinese e-commerce company Alibaba, as well as Yahoo Japan and a small portfolio of patents.

That compares with Yahoo’s peak value of more than $125 billion, reached in January 2000.

Marissa Mayer, Yahoo’s chief executive, is not expected to join Verizon, but she is due to receive a severance payout worth about $57 million, according to Equilar, a compensation research firm.

Verizon eventually confirmed this in a post a few hours ago by further saying the deal is going to be cash based and that “Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.”

Yahoo separately confirmed that its current CEO Marissa Mayer who was hired in July 2012 to turn the fortunes around will stay on at Yahoo and no further announcement as to when she might leave the company.  

 Yahoo informs, connects and entertains a global audience of more than 1 billion monthly active users** — including 600 million monthly active mobile users*** through its search, communications and digital content products. Yahoo also connects advertisers with target audiences through a streamlined advertising technology stack that combines the power of their data, content and technology. 

 Regardless of this though, Yahoo changed the face of the internet as you may know. If you opened an email and it’s over a 15 years, chances are you have a Yahoo account like me. Verizon meanwhile acquired AOL (America Online) last year and by adding Yahoo to its list of acquisitions, Verizon now has more than 25 brands in its portfolio.

Update

In an interview earlier with CNBC, Marissa Mayer said she doesn’t see the sale of Yahoo as a failure but said she thinks  “that overall when you look at what the company has achieved over its history and where we are today, I couldn’t be prouder of the team that we have and what we’ve been able to achieve,”

Under her leadership, Yahoo bought Tumblr for $1.1b in 2013 and became  the default search on Mozilla’s Firefox internet browser.