Verizon Communications agreed to acquire troubled internet pioneer Yahoo for $4.83 billion in cash, the companies said Monday.
With Yahoo, Verizon adds 1 billion monthly active users, including 600 million monthly active mobile users. The deal is aimed at making Verizon a bigger force in digital content and advertising.
“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,” said Lowell McAdam, CEO of Verizon.
Yahoo will be integrated with AOL under Marni Walden, executive VP and president of Verizon’s product innovation and new business group.
Under CEO Tim Armstrong, AOL has invested in and grown global premium brands, including The Huffington Post, TechCrunch, Engadget, Makers and AOL.com, and programmatic platforms—including One by AOL for both advertisers and publishers.
“Our mission at AOL is to build brands people love, and we will continue to invest in and grow them. Yahoo has been a long-time investor in premium content and created some of the most beloved consumer brands in key categories like sports, news and finance,” Armstrong said.
The sale does not include Yahoo’s cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents.
Yahoo intends to return substantially all of its net cash to shareholders and will determine and communicate a specific capital return strategy at an appropriate time.
Yahoo tried on its own to create original video programming, but the effort was not a success, resulting in big write offs. The company also became the first to stream an NFL game last season.
“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,” said Marissa Mayer, CEO of Yahoo.