What's Verizon Up To ?


If you haven't heard, Yahoo plans to sell its operating business to Verizon. They anticipate the completion of the transaction to occur in June 2017. At the completion, the Yahoo operating business will join the Verizon family of companies, and Yahoo Holdings, Inc. will be offering the Yahoo services you love and enjoy.

In connection with this proposed transaction, Yahoo is updating its terms of service. You can review the changes by visiting their Terms of Service. These updated terms will automatically be effective on June 8, 2017, unless you cancel your Yahoo account before then.

Then next up-

US Mobile has announced on their website that they have partnered with “the biggest and most dependable 4G LTE network in America” which anyone can take to mean Verizon, since that is essentially Verizon’s tagline.

US Mobile with its new network partner, becomes the first provider in the USA to be able to offer an à la carte pricing model on the Verizon network. US Mobile’s pricing structure is expected to remain unchanged, meaning those of you that are data hogs will be able to get 10 GB of 4G LTE data a month for $30 plus a $2 service charge. For those of you who place an emphasis on data over talk and text, this makes US Mobile the cheapest Verizon based provider to purchase data from. Like all Verizon MVNO’s, data speeds will still be limited to roughly 5 Mbps download and 2 Mbps upload.

Hum? with a Yahoo buyout that could be interesting.
Lit Bit on Yahoo's inception in 1995 to 2000, it grew from a promising start-up with $2 billion in venture capital to a $140 billion force of nature.
Following the dot-com collapse, Yahoo's value fell to $11 billion in 2002, its assets and investments severely devalued, along with every other tech giant.

When Yahoo attempted to buy Google for $3 billion in 2002, the latter wisely rebuffed the acquisition. Yahoo would eventually start its own search engine with sponsored links in 2004, but never came close to claiming Google's hold on the market. Oof, so their judgment hasn’t always been so great. They also passed up an opportunity to buy Facebook for $1 billion in 2006. (Facebook is now valued at around $350 billion.)

In 2008, Microsoft attempted a hostile buyout of Yahoo's shareholders at $45 billion - $37 billion more than Yahoo's current estimated value. Jerry Yang, Yahoo's CEO at the time, convinced shareholders to resist the buyout, a decision that has those same shareholders fuming now, and likely has Microsoft sighing in relief.

Currently, Yahoo is valued at $32 billion dollars, but financial sites like Forbes claim that Yahoo's ownership stakes in Chinese e-commerce company Alibaba and Yahoo Japan are collectively worth $36 billion alone. Without these assets, Yahoo's day-to-day businesses operate at a huge loss.

Still, Yahoo is demanding $10 billion from potential buyers as a starting price, based on the continued strength of its market outreach and name brand.

Lit Bit on Verizon, it made waves last year when it purchased another fallen tech giant, AOL, for over $4 billion. Fortune reports that Verizon's telecom revenue has stagnated, and it's looking to diversify into AOL's online advertising and news sources like The Huffington Post.
Purchasing Yahoo for its similar assets is Verizon's logical next step to continue expanding into the online advertising sector.

So the Multi-Billion dollar question-
"What is Verizon planning to do with Yahoo acquisition?"
In general:

  1. Use its Free Cash Flow to improve it’s numbers. It might not do a big deal for them, but anything helps.
  2. Have a stronger enterprise services offering. Google has proven to be the ruler of the enterprise solutions arena through Google Apps. Yahoo! has a very neatly interconnected suit of services that well operated and managed, and especially by a Telco, such as Verizon who serves corporate clients, would mean immediate business entry with a decent market share for Enterprise Solutions. They already have the clients, and with Yahoo! now they have the product.
  3. Beefing up its marketing offering and revenue. Yahoo! has a global data grid around users that allow them to deliver highly targeted advertising. By VZN buying Yahoo!, they get the systems to counter the weight that a Hubspot or a Google would now have on marketing / inbound marketing, semantics, and local search.
  4. Oh, and pay a lot less in taxes after the acquisition.
Verizon has entered into an agreement to buy Yahoo in an all-cash deal of $4.83 billion. The core business of the Silicon Valley internet giant will be integrated with AOL, the other iconic web brand that the telco behemoth bought last year for $4.4 billion. Private equity firms and other buyers like Quicken Loans had also made offers.

Yes, it’s over. Verizon is keeping the Yahoo brand, of course, but in terms of being an independent company and internet company that couldn’t, it’s done.

Yahoo’s board also has to deal with its other assets, which will be in an investment entity, including stakes in China’s Alibaba Group and Japan’s Yahoo Japan. That newco is also keeping the cash, some patents and minority investments. (Yahoo had invested in Snapchat, for example, although it would have been better to have invented Snapchat or it would not have ended like this.)
Gass :D
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