News / Business

Verizon buys Yahoo for $4.83bn

Monday, 25 July 2016 3:53 PM [ Last Update: Monday, 25 July 2016 3:53 PM ]

Verizon says it is going to buy Yahoo Inc. for $4.83 billion, a move which will mark the end of an era for a company that once defined the internet.

America’s largest wireless carrier Verizon says it is going to buy Yahoo Incorporation for $4.83 billion, a move which is expected to broaden the company’s digital reach.

This will be Verizon’s second biggest purchase of a tech giant after it acquired AOL in 2015 for $4.4 billion.

Yahoo will be rolled into Verizon's AOL operations but the move is already seen as an end of an era for a company that once defined the internet.

"We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo's full potential," AP has quoted AOL CEO Tim Armstrong as announcing in a statement.

AP says Yahoo is parting with its email service and still-popular websites devoted to news, finance and sports in addition to its advertising tools. The move will be taken under pressure from shareholders who are fed up with a steep downturn in the company's revenue during the past eight years, AP adds in its report.

The deal, expected to close within the first three months of next year, still needs approval from Yahoo shareholders. Yahoo's stock fell slightly at the open of trade Monday, AP reported.

AP’s report adds that the sale could potentially result in thousands of layoffs. It will also make Yahoo a holding company for its two stakes in China's e-commerce leader, Alibaba Group, and Yahoo Japan. Those investments, made more than a decade ago, are worth more than $40 billion before taxes, making them by far the most valuable pieces of Yahoo. The holding company will drop the Yahoo name and adopt a new identify after Verizon takes control of the operating business, AP has further emphasized in its report on the historic transaction.

Yahoo also still has a patent portfolio that it intends to sell, and about $7.7 billion in cash.

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