Verizon Acquires Yahoo! for $4.48 Billion

Gladys Abbott
June 15, 2017

What: Verizon has made it official, today the tech company announced it has finally closed its acquisition of Yahoo for U.S. $4.5 billion and combined these assets with its existing AOL business to create a new subsidiary: Oath.

The CEO's "readjustment" may refer to the fact that Verizon plans to cut about 2,000 jobs - 15% - of the 14,000 employees at the new combined company Oath.

As part of the deal, Yahoo will now be a part of Verizon's new media subsidiary Oath, which includes HuffPost, AOL and Tumblr. AOL's CEO Tim Armstrong will be the CEO of the new company (which will own more than 50 media brands), but the Yahoo and AOL consumer brands will remain.

The deal also brings to an end the 5-year rule of Yahoo's CEO Marissa Mayer, who is not joining the new company.

"The company had confronted seemingly insurmountable business challenges, " Mayer said in her leaving message to employees.

Verizon is counting on the combination of Yahoo and AOL to build a strong third alternative in a rapidly growing digital advertising market that is now dominated by Google and Facebook.

In all its hopes of challenging Google and Facebook, Verizon closes the deal with Yahoo for $4.5 billion. "However, I want all of you to know that I'm brimming with nostalgia, gratitude, and optimism", she wrote.

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Sports, AOL.com, MAKERS, Tumblr, Build Studios, Yahoo!

As per Yahoo's previous filings with the Securities and Exchange Commission (SEC) it is estimated that Mayer's "golden parachute" payout will amount to more than $23m.

In Verizon's announcement, Marni Walden, president of Media and Telematics at Verizon, said the transaction represents a "critical step in growing the global scale" that Verizon needs.

"With a house of brands as diverse as ours, we wanted a name that was values led - one that honoured our ultimate commitment of Building Brands People Love", a statement from the company reads on its website.

Thomas McInerney, a Yahoo board member, will become Altaba's chief executive officer.

Yahoo's stake in the e-commerce giant, Alibaba, and Yahoo Japan will be diverted into a holding company called Altaba, Inc.

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