Verizon and Yahoo have reportedly finalized a deal in which the former gets most of the latter's physical assets for almost $5 billion. The upcoming deal will also require CEO Marissa Mayer to step down.
Most of Yahoo's intellectual property rights however, are not included in the deal, according to The New York Times. The once mighty search engine company will retained its holdings at Chinese company Alibaba and Yahoo Japan. Its total investments with these two companies are estimated to be around $40 billion. The sales amount and remaining investment of Yahoo is a far cry from its 2000 value of around $125 billion.
Verizon sees the deal as a way to increase its digital advertising revenue. This will make the phone company as the third largest digital ads company in the world. This could also possibly benefit its customers. Stock analyst Craig Moffet said the Verizon may transfer some costs to advertisers and removing the burden from its subscribers.
Both Yahoo and Verizon stocks rose marginally on July 22 after Bloomberg News reported that the deal is about to be finalized. Yahoo stockholders led by Starboard have been pushing for a sale since 2014. CEO Marissa Mayer initially refused to consider such option. But early this year she relented and began talks with interested buyers, according to an earlier iTech Post report.
The impending sale will also likely mean the removal of Mayer as Yahoo CEO. It is a sad end for the former Google executive who was hailed as the one who will save Yahoo almost three years ago. She did have some access in improving the company's services. However, Yahoo continued to struggle with stagnant revenue.
Mayer tried to sell the company's stake in Alibaba but cancelled the sale to avoid tax complications but angered shareholders in the process. Both companies refused to issue a statement on the impending sale.
