Verizon News & Update: Invests in Struggling Yahoo for $4.8B, But Why

By Olivia Cavallaro , Updated Jul 26, 2016 04:27 AM EDT
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After 22 years of existence as an independent company, Yahoo, which has been synonymous to the Internet (or World Wide Web) since it launched in the 90s, has been acquired by Verizon for $4.8 billion.

The deal comes after the company failed to reach its lofty $100 million sales goal for Tumblr, which they acquired in 2014. Yahoo's Tumblr, alongside Flickr and its Mail, Search, News, Groups, Finance, and Fantasy Sports brands will now belong to Verizon, which also acquired AOL and The Huffington Post.

According to Slate, the marriage of AOL and Yahoo under Verizon's wing would result into a "powerhouse" of a company, because its traffic along would make them America's "largest digital media company." Verizon, as a data provider, can track and study its users habits and searches, and like Facebook and Google, can position itself as a better advertiser given the data they can harness from the service they provide their clients.

Forbes reports that Mayer had already written a final letter to Yahoo employees, crediting the company for "humanizing" the Internet, and crediting the staff for the hard work they had put in, mentioning the word "work" about five times in the letter. However, it still doesn't erase the fact that the company had struggled and had declined sales in the past years.

Mayer also wrote that she plans to see the acquisition to its completion, and make sure that the company continues to achieve its goals throughout the rest of the year. She said that the agreement between Yahoo and Verizon is to be closed during the first quarter of 2017.

CNN Money reports that Mayer told investors last week that the company is still working towards creating "long-term sustainable growth" and "value to our users, advertisers, employees, and shareholders," and that the acquisition is groundwork for "a solid foundation for Yahoo!'s next chapter."

AOL chief executive Tim Armstrong will be handed the reins on Yahoo's websites. Believes that the acquisition will place them in a very competitive position in terms of mobile media, as per The Washington Post. What remains to be seen, however, is how this will play out in the future.

After all, $4.8 billion seems like a measly price compared to what Microsoft offered back in 2008: $45 billion.

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