Newspaper article The Christian Science Monitor

Why Verizon Is Paying $4.83 Billion for Yahoo

Newspaper article The Christian Science Monitor

Why Verizon Is Paying $4.83 Billion for Yahoo

Article excerpt

Verizon announced it had agreed to buy Yahoo's key internet businesses for $4.83 billion Monday, ending months of speculation about the future of the troubled search engine giant.

The sale appears to mark the demise of an online pioneer that was one of the most valuable companies during the dot-com boom, before struggling in recent years despite a series of turnaround efforts under chief executive Marissa Mayer.

But for Verizon, the largest phone carrier in the United States, acquiring Yahoo represents an opportunity to further its ambitions to become a key player in the lucrative world of digital advertising, a field now dominated by Google and Facebook.

"This sale is not only an important step in our plan to unlock shareholder value for Yahoo, it is also a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising, and social," Ms. Mayer said in a Tumblr post addressed to Yahoo employees, adding that she intended to remain with the company "to see Yahoo into its next chapter."

The deal joins together Yahoo and fellow online pioneer AOL, which Verizon acquired last year for $4.4 billion, gaining both online ad business and popular sites such as The Huffington Post.

It also illustrates where Yahoo may have gone astray, with a slew of online properties from news sites to Tumblr, a microblogging site, some analysts say.

"Yahoo has failed for the last 13 years to exploit as a unified whole what is actually an excellent set of parts," Shar VanBoskirk, an analyst at Forrester Research, told The Washington Post. "Yahoo hasn't been able to clearly define what it is and what value it provides."

But Verizon, which was considered one of the top suitors to acquire Yahoo amid speculation that it would be sold, could also face challenges as it seeks to increase its focus on online ads.

Combined, Yahoo and AOL's various sites attract 50 percent more unique visitors than Google, now considered the top digital media property in the US by the industry ranking ComScore, The Washington Post reports. …

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