Verizon to Buy Yahoo In Continued Quest Against Facebook and Google
According to a breaking Bloomberg report, Verizon Communications Inc. will announce its plans to buy Yahoo! Inc. for about $4.8 billion on Monday. Verizon acquired AOL for $4.4 billion as part of its aspiration to be a leading provider of internet services.
Why does Verizon want Yahoo?
With Yahoo, Verizon will get a global platform against Internet giants like Facebook and Google but also enablement to possibly compete with Netflix and Amazon Prime on video content.
Yahoo currently serves 1 billion users each month on its homepage, Yahoo Sports and Yahoo Finance whereas AOL serves 100-200 million visitors. This acquisition will add huge scale to Verizon’s internet reach. Verizon can provide business and entertainment content to billions of visitors and generate significant advertisement revenue. With Yahoo, the advantage Verizon has over its telecom competitors is it can now provide content for free and monetize data services based on data usage, network bandwidth, advertisements served etc. With AOL, Verizon’s mobile content was also limited and Yahoo helps overcome that however not to the extent of Facebook and other providers who lead in the mobile space.
Marissa Mayer, Yahoo’s President and CEO who has been in the news constantly for making efforts to turnaround the company must feel somewhat relieved with this transaction. Yahoo is not #1 in search and the company has not really innovated and showed anything close to what Facebook, Twitter and new Internet companies such as Uber, AirBnB and others are bringing forward. This move could very well position Yahoo as the back end engine that Verizon can use to position itself as a strong and differentiated Internet player.
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