Verizon Communications Inc is the frontrunner in acquiring the core business of Yahoo Inc for about $5 billion. Both the companies are expected to announce the deal publicly within a few days.
Verizon, USA’s leading telecommunication provider, bought the online mass media company AOL last year in a deal amounting to 4.4 million USD. The company has been eyeing to buy Yahoo for some time and now we have confirmation from the people close to both the companies about the forthcoming acquisition. Yahoo is one of the most popular internet company in the world having numerous services, starting from search engine to news to social media. Verizon will now be able to make use of Yahoo’s advertising platform, email service provider, social networks, etc. to combined with AOL’s internet operations to make a substantial impact on the web.
Yahoo will just be left with a 15 percent share in Alibaba Group of China and 35.5 per cent share in Japan’s Yahoo. The company will also cease to be an operating company after the acquisition by Verizon. The deal regarding the core assets is projected to be over within this month itself, although both the companies are still negotiating without any final agreement. Reports suggest that the companies have almost closed into the price of 5 billion USD. Neither Verizon nor Yahoo has yet verified this.
Verizon is trying to push up its earnings by developing an ad-supported video service named go90. The service started in October last year featuring videos from Vice, Comedy Central along with soccer and basketball games.
Companies like AT&T, Quicken Loans, TPG Capital LP, etc. were in line to buy the assets of Yahoo. Yahoo, which was one of the leading internet companies, gradually degraded due to faulty company policies, mismanagement, and competition from others like Google.