On Monday, Verizon announced that it is buying Yahoo for roughly $4.83 billion. The sale comes just over a year after the broadband telecommunications company bought AOL for $4.4 billion.
As with any major takeover, the acquisition will need to be given approval by regulators, but also Yahoo's shareholders -- the people who have been waiting for Marissa Mayer to "unlock" Yahoo's inherent value. Verizon expects the deal to close in the first quarter of next year, with Yahoo continuing to "offering and improving its own products and services for users, advertisers, developers and partners" in the meantime.
Although Verizon will own Yahoo’s “content brands” and “technology assets,” including Brightroll, Gemini and Flurry, Verizon wrote the following in a statement:
The sale does not include Yahoo’s cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents (called the Excalibur portfolio). These assets will continue to be held by Yahoo, which will change its name at closing and become a registered, publicly traded investment company. Yahoo will provide additional information about the investment company at a future date. [The] transaction will create a new rival in mobile media technology reaching over 1B users with an unrivaled roster of the world’s most beloved brands.
After the announcement, Mayer aired a letter she sent to employees, posting it on her personal Tumblr blog as well as Yahoo’s Tumblr blog. After writing that the acquisition “presents exciting opportunities to accelerate Yahoo’s transformation,” she said she’s “planning to stay”:
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.
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VentureBeat reported that Mayer’s statement “runs in stark contrast” to The New York Times’ report that Mayer would get roughly $57 million in severance.
Here's another portion of The Times’ report:
Ms. Mayer, who was hired as Yahoo’s chief executive four years ago but failed to halt its decline, was nevertheless rewarded handsomely for her efforts. Including the severance, she will have received cash and stock compensation worth about $218 million during her time at Yahoo, according to Equilar’s calculations.
However, VentureBeat’s Paul Sawers wrote that Mayer might stay only until the deal has been finalized:
This sounds like Mayer is not only staying, but staying for the long haul, though it could also be interpreted to mean that she’s planning on sticking around only until the acquisition is concluded in early 2017. In other words, there’s wiggle room in there, and it’s not yet 100 percent clear whether she’ll join Verizon next year.
Whether or not she sticks around, Recode characterized Mayer’s statement this way:
[Mayer] is mightily trying to put a shiny, happy face on a deal that will effectively be taking away her job and wash away her efforts to turn around Yahoo as what has turned out to be its last CEO.
Here’s another excerpt of Mayer’s attempt to paint the sale in a positive light, in which jargon abounds:
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 [the company’s strategy to boost mobile, video, native advertising and social media ]—it’s incredibly compelling.
Yahoo is a company that changed the world. Now, we will continue to, with even greater scale, in combination with Verizon and AOL.
In a joint announcement, Mayers also said:
Yahoo and AOL popularized the Internet, email, search and real-time media. It’s poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile.
Mayer wasn’t the only executive to paint a rosy picture with corporate lingo. Here’s what Verizon CEO Lowell McAdam had to say:
Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers. The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.
Tim Armstrong, chief executive of AOL, also chimed in:
We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth. Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers.
What do you make of the statements, PR Daily readers?
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