Once an iconic internet giant, Yahoo was recently acquired by U.S. telecom company, Verizon Communications, Inc., for $4.83 billion USD. The deal involved the acquisition of Yahoo’s “core” business, which is comprised of email, search, advertising products, real estate, as well as Yahoo Finance and other media business. This acquisition does not cover Yahoo’s stakes in Alibaba, Yahoo Japan, or its patents portfolio. Beating out competing bidders such as Bain Capital, AT&T, and Vista Equity Partners, Verizon secured the deal, taking a step towards boosting its media and advertising business. In 2015, the telecom giant acquired America’s global mass media corporation, AOL, for similar reasons.
This is not the first time a telecom company has ventured into the media and advertising business. This particular acquisition is seen as a move on the part of Verizon to compete with Google and Facebook in the area of advertising. With its 1 billion global users, which includes 600 million mobile users, Verizon plans to merge Yahoo with AOL in order to build a larger media and advertising subsidiary. Through this deal, Verizon is also aiming to reach out to mobile consumers in a more effective manner. From the perspective of Yahoo, this deal will enable the company to build its projects in native advertising, social, video, and mobile.
Other major company acquisitions to date
The Verizon-Yahoo deal is seen by many as the downfall of the poster-child of the internet, as the acquisition reflects the fickleness of the digital world. It also brings us back to important bottom line: companies need to continually reinvent themselves and respond effectively to changes in the market in order to weather the technological storm and stay relevant in the competition. IBM and GE can be regarded as the best examples of this. Further, the acquisition is a reminder that the lifespan of enterprises, especially technology companies, has been drastically shortened, calling for improved business strategy, foresight, and scrutiny of competitors.
Most of all, the acquisition is a wakeup call for many companies that are struggling to keep up their sales or monetize their products. The coming years are sure to see many more mergers and acquisitions, especially as the tech and media giants continue to expand.
