In May last year, Verizon had bought AOL, the American mass media corporation engaged in publishing news, sports, movie reviews, technology updates and TV trends for $4.4 billion, aiming to establish an online presence. With this purchase of Yahoo, Verizon aims to widen its array of digital services including news-focused websites, search engine operation (SEO), social network Tumblr, email services adding value to the pre-existing AOL offerings.
Lowell McAdam, Verizon Chairman and CEO stated:
Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers. The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.
Verizon claims that integration of AOL and Yahoo will have more than 25 brands in its portfolio to carry on the flow of investment and growth. With this acquisition, Verizon will take over Yahoo’s online assets that ranges from search, instant messaging and mail and also its advertisement technology, but the deal does not entail Yahoo’s stake in Alibaba. The deal is subject to customary closing adjustments. Yahoo will be working with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.
The company cites that the addition of Yahoo will create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities. Additional technology assets in the advertising space include Brightroll, a programmatic demand-side platform; Flurry, an independent mobile apps analytics service; and Gemini, a native and search advertising solution.
Marissa Mayer, CEO of Yahoo said:
Yahoo and AOL popularized the Internet, email, search and real-time media. It’s poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile. We have a terrific, loyal, experienced and quality team, and I couldn’t be prouder of our achievements to date, including building our new lines of business to $1.6 billion in GAAP revenue in 2015. I’m excited to extend our momentum through this transaction.
AOL has invested in and grown global brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com, and programmatic platforms including ONE by AOL for both advertisers and publishers, Tim Armmstrong, CEO, AOL, added:
We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth. Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers.