Yahoo is 22 years old. Yahoo has around 10,000 employees and last year made US$4.96 billion in revenue. Yahoo is being acquired for just US$4.8 Billion (A$6.4B).
On July 16, 2012, Mayer was appointed President and CEO of Yahoo! who rose through the ranks at Google engineering and was supposed to turn around a struggling Yahoo.
The company has a number of loved assets, including the Yahoo front page that remains one of the most popular destinations on the web. Yahoo Mail is still used by around 225 users every month. Yahoo also own Flickr, which before Facebook was the largest photo sharing site on the net and in May 2013 acquired Tumblr for US$1.1 billion.
Despite the size of the product and service suite at Yahoo, one of their biggest successes was a 40% stake in Alibaba which unlike Yahoo continues to head in a positive direction.
The list of services shut down by Yahoo reflects their identity crisis, a company that has long struggled with a clear, definitive reason for existing and a comprehensive vision to support future growth. At its peak back in 1999, Yahoo’s share price was $108.17, but is now worth just $39 per share.
The heavily contentious advertising deal between Bing and Yahoo split last year, however this year, the Bing division at Microsoft reported a US$5.3 Billion profit this financial year.
In Australia, Yahoo! formed an association with the Seven Network which is hard to imagine will be of much interest to Verizon after the acquisition.
Last year Verizon acquired Aol last year for $4.4 billion, a company that owns the Huffington Post, Engadget, TechCrunch and Autoblog to name a few high profile brands. Verizon has a market cap of US$228.68 Billion, so they’re not short of a dollar, that said, they picked up Yahoo for an absolute song.
There’s no question Mayer didn’t deliver Yahoo the boost we all hoped it would. With a company that size, you can never align the blame with one single person as a board and multiple layers of management are responsible for the products, services and deals done that affect the bottom line.
The US wireless carrier plans on having the deal completed, through regulation next year.
Here’s the official statement from Verizon and below is the full letter from Marissa, announcing the acquisition on Tumblr.
Dear Yahoos,
Moments ago, we announced an agreement with Verizon to acquire Yahoo’s operating business. This culminates a rigorous, thorough process over many months, and yields a great outcome for the company. Today’s announcement not only brings us an important step toward separating Yahoo’s operating business from our Asian asset equity stakes, it also presents exciting opportunities to accelerate Yahoo’s transformation. Among the many entities that showed interest in Yahoo, Verizon believed most in the immense value we’ve created, and in what a combination could bring our users, our advertisers, and our partners.
This is a good moment to reflect on Yahoo’s journey to date.
Yahoo is a company that changed the world. Before Yahoo, the Internet was a government research project. Yahoo humanized and popularized the web, email, search, real-time media, and more.
What really sets Yahoo apart is the shared passion to create great products for our 1B+ users, and in doing so, transforming the world for the better. You can clearly see that spirit, that commitment, that fight in the work we’ve done together over the past few years. We set out to transform this company – and we’ve made incredible progress. We counteracted many of the tectonic shifts of declining legacy businesses, and built a Yahoo that is unequivocally stronger, nimbler, and more modern. We tripled our mobile base to over 600 million monthly users, we invested in and built Mavens from basically zero in 2011 into $1.6B of GAAP Revenue in 2015, we streamlined and modernized every aspect of our consumer products, and, with Gemini and BrightRoll, we dramatically improved our advertiser products. This only scratches the surface of what we’ve achieved… and we all know how much hard work it took to get here.
It’s because of that hard work and resilience, that Yahoo will realize amazing opportunities in its next chapter.
This sale is not only an important step in our plan to unlock shareholder value for Yahoo, it is also a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising, and social. As one of the largest wireless and cable companies in the world, Verizon opens the door to extensive distribution opportunities. With more than 100 million wireless customers, a shared view of the importance of mobile and video ad tech, a deep content focus through AOL, Verizon brings clear synergies to the table. And with their aggressive aims to grow global audience to 2B users and $20B in revenue within the mobile-media business by 2020, Yahoo’s products and brand will be central to achieving these goals. Joining forces with AOL and Verizon will help us achieve tremendous scale on mobile. Imagine the distribution challenges we will solve, the scale we will achieve, the products we will build, and the advertisers we will reach now with Mavens – it’s incredibly compelling.
The strategic process has created a lot of uncertainty, but our incredibly loyal and dedicated employee base has stepped up to every challenge along the way. Through the first half of the year, we met our operational goals and overachieved on plan. But, further, there are things that you cannot measure, like the passion of the people behind the products. The teams here have not only built incredible products and technologies, but have built Yahoo into one of the most iconic, and universally well-liked companies in the world. One that continues to impact the lives of more than a billion people. I’m incredibly proud of everything that we’ve achieved, and I’m incredibly proud of our team. For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter.
As we work to close this agreement in Q1 2017, it’s more important than ever that we come together as one global team to continue executing on our strategic plan through the remainder of the year. We have delivered the first half of the year with pride, achieving our goals. Now, it is up to us to make Yahoo’s final quarters as an independent company count.
Yahoo is a company that changed the world. Now, we will continue to, with even greater scale, in combination with Verizon and AOL.
Thanks,
Marissa
