Verizon has finally breached the line and will be soon announcing its acquisition of Yahoo for nearly $5 billion. Yahoo has probably seen its better days, but with the recent reports coming out of the company that had “for sale” signs all over it, Verizon has been eager now for months to swallow up the media company that was a former giant in the market, alongside AOL.
News of the final buyout deal for Yahoo comes after months of Verizon negotiating the deal that would help the company leverage its presence in the media market, allowing for its users to have a broader reach with more options, according to a report on Reuters.
— Marsha Collier (@MarshaCollier) July 24, 2016
News of the Verizon and Yahoo deal had been speculated about all weekend, with many seeing Verizon as the frontrunner to buy out Yahoo, but it has all been speculation up until this point. What’s even more puzzling is that the struggling nature of Yahoo’s business does not seem to faze Verizon or its investors.
Up until about five years ago, Yahoo had a major presence in the online media market. Although they did struggle to compete with Google for search engine users in the beginning, they did finally find some ground that the could stand on with many different media ventures, which included a resurrection of the hit comedy show Community. But apparently, resurrecting a hit TV show was not enough to keep the company on top of the media market and did nothing to expand its market share under the leadership of Marissa Meyer.
Verizon has already swallowed up another old name in the online media business, which was AOL. The buyout of Yahoo will do wonders for Verizon to help boost its market share with AOL and the internet business could indeed see a resurgence if the Yahoo property can perform like expected.
Yahoo is one of the oldest companies in the online media market, dating back as far as 1994 when two students from Stanford University built the platform and saw a quick surge in their business. That was also a time of the great “dot com” boom and President Bill Clinton was able to expand the economy to such grandiose levels in the ’90s thanks to companies like Yahoo, Google, and AOL.
Your 1995 tech update: Yahoo founders turn hobby into a business, reject temptation to make a quick buck. pic.twitter.com/VKz5rbkWdv
— Harry McCracken (@harrymccracken) July 24, 2016
Now, with Google being the only one remaining that is still standing under its own umbrella, the online media market has expanded to include user-friendly platforms like YouTube (Google owned), Facebook, Twitter, Instagram, Netflix, and many other streaming media companies and news organizations.
The Verizon buyout of Yahoo could also leave a much deeper scar in the market for their emerging and expanding platforms, which includes AOL. Verizon acquired AOL for $4.4 billion last year and will now be acquiring Yahoo for an estimated $4.8 billion this week, according to the reports.
But Verizon will have their work cut out for them if they want their new Yahoo asset to pay off for them. According to a report by The Washington Post, Yahoo has been struggling for so long now that it would take an enormous shockwave to turn it around, even under the ownership of Verizon.
Shar VanBoskirk, an analyst for Forrester Research, spoke with The Washington Post and there were some interesting comments about Yahoo’s crisis of identity.
“Yahoo has failed for the last 13 years to exploit as a unified whole what is actually an excellent set of parts,” VanBoskirk told The Washington Post. “Yahoo hasn’t been able to clearly define what it is and what value it provides.”
— Adweek (@Adweek) July 24, 2016
If all goes as planned, then Verizon should be announcing their buyout of Yahoo tomorrow before the opening bell on the New York Stock Exchange.
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