Yahoo inks $4.8 billion deal with Verizon for core business

On the media side, Mayer’s big hires seemed to make headlines everywhere, but there were complaints that their stories rarely made it to the heavily trafficked Yahoo homepage. And these “dividend kings” have boosted payouts 50 years in a row… Yahoo will also retain its cash, convertible notes, certain minority investments, and a noncore portfolio of patents called Excalibur.

“Verizon will be the corporate master and exercise control but they want to create opportunities for innovation and not impose a culture that will send employees out the door”. VZ’s current assets include Huffington Post, TechCrunch, and the mobile video app go90.

Verizon’s purchase of Yahoo should strengthen its America Online Internet business, which it bought past year for $4.4 billion. It wasn’t long ago that Yahoo was once worth around $US125 billion ($167 billion), and had an offer from Microsoft to buy its business for almost $US45 billion ($60 billion).

Other players said to be lining up for Yahoo were fellow communications player AT&T and an investment group that is comprised of private equity firms and is backed by Warren Buffett.

“As we embark on this new partnership and work towards an expected close in the 4th quarter of 2016 or early 2017, we remain committed to delivering the highest possible value”.

Instead, Mayer will likely go down as the last CEO to run Yahoo as an independent company due to a similar list of mistakes. The only known Yahoo business today is photo-sharing website Flickr and the slowly growing microblogging and social networking website Tumblr.

CEO Marissa Mayer announced that she intends to stay back at the company once the deal is closed.

“I don’t anticipate Verizon doing away with the Yahoo brand, they will maintain the Yahoo name on a lot of its very good media properties”.

But Mayer did not spell out what that next chapter entails. Here’s what investors can expect from the Yahoo stock price now…

Verizon’s deal for Yahoo could give the phone company a stronger foothold in digital advertising as it takes what it knows about its customers’ whereabouts and combines that with Yahoo’s popular destinations and AOL’s advertising expertise.

In a statement released overnight, AOL described the Yahoo acquisition as a “huge win”. The bid is eventually raised to $47 billion before Microsoft CEO Steve Ballmer abruptly rescinds the offer after Yang demands even more money. Jefferies analyst Mike McCormack said he’s doubtful an older internet brand like Yahoo will bring in the kinds of users that Verizon has been trying to lure with go90.

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Yahoo had a $37 billion market value at the end of trade Friday, but its Alibaba and Yahoo Japan holdings are estimated to be worth $40 billion or more. Mayer has already jettisoned 1,900 Yahoo workers since last September.