Verizon has acquired Yahoo for a whooping sum of $4.8 Yahoo Finance has reported.
In February, 2016 Yahoo put itself up for sale and it fielded multiple bids from different types of buyers supposedly as many as 40 at one point.
Those included AT&T; Quicken Loans founder Dan Gilbert with financial backing from Berkshire Hathaway CEO Warren Buffett; and private equity firms TPG and Vector Capital Management.
According to Re/code, Yahoo informed the other bidders on Saturday that Verizon had won the process.
“Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL,” said Yahoo CEO Marissa Mayer in a press release. “The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo. This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social.”
Tim Armstrong, CEO of AOL when Verizon acquired it for $4.4 billion last year, will run a new group at Verizon that brings together AOL and Yahoo, he confirmed on Bloomberg TV on Monday. “Our mission at AOL is to build brands people love, and we will continue to invest in and grow them,” he said in a press release. “Yahoo has been a long-time investor in premium content and created some of the most beloved consumer brands in key categories like sports, news and finance … We have enormous respect for what Yahoo has accomplished.”
Marissa Mayer was generally not expected to stay on board, but said in a Yahoo blog post on Monday that in fact she will. “For me personally, I’m planning to stay,” she wrote. “I love Yahoo… It’s important to me to see Yahoo into its next chapter.” She did not specify what role she would serve.
Verizon’s acquisition is of “core” Yahoo, which includes search, email, advertising products and the media business (including Yahoo Finance). It did not acquire Yahoo’s 15% stake in Alibaba, its 35% stake in Yahoo Japan, or Yahoo’s patents, which some analysts suggested during the bidding process were valuable.
As Suntrust wrote in a note this month, “Yahoo is running two auctions in parallel – core sale and Excalibur patent portfolio – so we wouldn’t be surprised to see multiple winners.” If there is a winner of Yahoo’s patents, it remains to be seen who that is and how much they will pay. Suntrust predicted the Yahoo sale would generate $6 billion, “in one or multiple transactions.”
Verizon has made a string of acquisitions in an apparent effort to move beyond a telecom provider into a media-and-mobile-advertising powerhouse that can compete with Google. Many believe buying Yahoo is a savvy move for Verizon.
In addition to getting the fifth-most visited web site in the US, Verizon gets assets like Tumblr, Flickr, Polyvore and digital ad tools Flurry and BrightRoll.
Last week, Yahoo reported second-quarter earnings of 9 cents per share and revenue of $1.31 billion, which beat analyst expectations. Revenue of its MaVeNS division (mobile, video, native and social), which accounts for more than 30% of Yahoo’s revenue, rose 25% last quarter. Yahoo shares are up 32% in the last six months during the public sale process.
Verizon reports its own Q2 earnings on Tuesday, and reportedly wanted to announce the Yahoo deal before that.