Verizon Communications Inc will announce on Monday morning a deal with internet pioneer Yahoo to buy latter’s core assets for about $4.8 billion, according to reports. The announcement will be made before the trading starts at New York Stock Exchange, Reuters reported.
Yahoo agreed for the deal eight years after rejecting Microsoft’s $44 billion offer for takeover in 2008, according to Agence France-Presse.
Verizon, the United States’ biggest telecommunications company that won the auction for Yahoo Inc, will buy its advertising technology tools, search, mail, messenger and real estate. The deal is expected to enhance Verizon’s AOL internet business.
The amount of the deal was first reported by Bloomberg, according to which Verizon would compete closely with Google and Facebook after acquiring Yahoo.
“The deal speaks to a clear strategy shift at Verizon. They are trying to monetize wireless in an entirely new way. Instead of charging customers for traffic, they are turning to charging advertisers for eyeballs,” Bloomberg quoted MoffettNathanson’s analyst Craig Moffett as saying.
“Verizon is hoping that combining Yahoo’s content with AOL’s ad technology platform and Verizon’s own insights into user data can make the advertising inventory much more valuable,” he said.
Yahoo will not remain an independent company post the deal, but will continue to have ownership in Yahoo Japan and Alibaba Group Holding Ltd. Yahoo has 35.5 percent stake in Yahoo Japan and 15 percent in Alibaba, together having a market value of about $41 billion, according to the New York Times.
Marissa Mayer, the chief executive of Yahoo, may not join Verizon but will receive a severance package of $57 million.
Founded in January 1994 by Jerry Yang and David Filo and headquartered in California, Yahoo agreed to sell its core assets for an amount that is extremely less than its peak value of $125 billion in January 2000.
The internet giant started to fall apart following the entry of search giant Google and social networking site Facebook in the market. It reported a quarterly loss of $440 million earlier in July.
New York-based private hedge fund sponsor Starboard Value LP had encouraged Yahoo for the sale in December 2015.