Verizon-Yahoo deal closing said to be close after $250 million price discount

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According to Bloomberg, Verizon is close to a renegotiated deal for Yahoo, which would bring the price down $250 million. That’s quite a bit less than the previously rumored $1 billion being sought by the telecommunications company.

The originally announced purchase price was $4.8 billion.

Another provision of the renegotiation, which probably kept the purchase price from being cut further, is shared liability between Verizon and Yahoo successor Altaba for any data breaches or hacks. The latter will retain assets not being sold to Verizon, including the company’s remaining Alibaba stake. Altaba is apparently a combination of “alternative” and “Alibaba.”

The Verizon-Yahoo renegotiation was triggered by revelations of multiple hacking episodes that occurred in 2013 and 2014. The disclosures came after the Verizon deal had been announced, following solicitation of multiple bids for the company.

The sale of Yahoo was triggered largely by institutional investor demands after CEO Marissa Mayer was unable, after several years, to produce results that satisfied them. Mayer previously said she wants to remain at Verizon after the deal concludes.

Once the deal does close, this quarter, Verizon will need to rationalize and combine its AOL and Yahoo properties. It will also face the same competitive market pressures — namely Google and Facebook — that prevented Yahoo from regaining its display advertising leadership.

Despite its challenges, Yahoo retains a significant loyal user base and remains the number three US internet property after Google and Facebook, according to comScore.


About The Author

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.


 

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