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Verizon nears deal to acquire Yahoo
- joobus 10y ago> Verizon is discussing a price close to $5 billion for Yahoo’s core Internet business... Yahoo's current market cap is ~$37b
- jonknee 10y agoMost of that is its stake in Alibaba (15%, currently worth ~$31B...).
- dangrossman 10y agoYahoo! has three major assets: its stake in Alibaba (worth about $32B), its stake in Yahoo! Japan (worth about $8.5B), and its core internet business. Verizon would only be buying that last piece.
- FlyingLawnmower 10y agoWhile it is fun to do the subtraction and see that Yahoo's core business is negatively valued, liquidating the Alibaba and Yahoo Japan assets would come at the expense of significant taxes, which I believe accounts for why shareholders value the firm the way they do. Still shocking how drastically small the core asset valuation is in comparison to a deal Yang struck years ago, but it might make the valuation make more sense.
- vonmoltke 10y agoAlso, the simple subtraction ignores that the drag on Yahoo's value is debt. If Yahoo sold their stakes in Alibaba and Yahoo Japan the cash would presumably be used to pay off that debt. It is incorrect to tie all of the debt only to the core business.
- btian 10y agoNo idea what you mean by that. Yahoo has $6B in cash and short term investments, and $1.2B in debt.
- vonmoltke 10y agoThat is just the "current" debt. They also have almost $15B in long-term liabilities, primarily $13.5B in deferred tax payments and $1.2B in general long-term debt.
- btian 10y agoDeferred tax is only payable when shares in Alibaba are sold, which will not. Yahoo will spin it off tax free to shareholders.
- ilostmykeys 10y agoHopefully this will sink Verizon.
- maxerickson 10y agoThere's ~0 chance of that happening. Verizon can afford to completely write off $5 billion, so you would need some sort of poisonous cultural inversion for the deal to sink Verizon. (Verizon is a much larger company, so if the Yahoo culture ended up dominating it would be an inversion)
- CodeSheikh 10y agoA bad marriage is taking place.
- chollida1 10y agoIt's now being reported that Verizon and Yahoo are exclusively negotiating. That's as close as anyone has gotten since Microsoft made an offer years ago. Verizon is really doing a big transition with this acquisition and their AOL acquisition. They've acquired alot of valuable web space to put adds on/monetize. This is a probably good news for Yahoo employee's as Verizon then has a vested interest in keeping the company running and not splitting it up into pieces like a PE firm may be more inclined to do. The one interesting thing I've heard is that Verizon isn't interested in Yahoo's patent portfolio, which means it could still be up for grabs. Hopefully its bought by a Microsoft/Google consortium and very liberally cross licensed rather than a private equity firm who will look to more aggressively monetize it. I also heard that Tim Armstrong, formerly of Google with Mayer will lead the combined AOL/Yahoo company, which means that Mayer probably isn't coming along as part of this deal. I think most people expected this. If this ends up going through for the reported 3.5 billion, then Verizon has bought a significant portion of traffic on the web for roughly 8 billion (AOL was acquired for 4.4 Billion). This could end up looking like a very good acquisition in a few years!
- bane 10y agoI think Verizon is very close to realizing they're finally just becoming a utility and desperately want to stay in a higher-level game. But everybody completely ignores Verizon branded initiatives in this area (mostly because the combine being terrible with expensive). Buying existing brands is a much more likely path to success.
- Mahn 10y agoI read this acquisition as trying to take over as much of internet traffic "market share" as possible. Verizon is well into the online advertising game with AOL, so the larger piece of the pie they own the more control they have, and thus the better for them on the long term. It makes sense. The best buyer had to be someone that isn't Google or Facebook but is significantly invested in online advertising.
- exhilaration 10y agoHopefully its bought by a Microsoft/Google consortium and very liberally cross licensed I don't think such a consortium exists, Microsoft and Google are usually on opposite sides. Microsoft (along with Apple/RIM/others) bought the Nortel patents in 2011 and sued Google, Samsung, Huawei, and others. Google bought Motorola and its patents the same year and sued Microsoft. Patents are weaponized as soon as these companies acquire them.
- chkuendig 10y agoSo finally that merger with Aol is happening after all...
- cpeterso 10y agoA Yahoo!/AOL will be a bit of a homecoming for Mozilla. :)
- empath75 10y agoWe have the mozilla dragon down the hall at aol headquarters --- it's a Pokemon Go Gym, even.
- ngokevin 10y agoThe San Francisco Mozilla Office is its own Pokemon Go Gym also. It's down the street from the Niantic HQ too.
- mintplant 10y agoIt's in one of the official screenshots on the app's Google Play page, too. http://i.imgur.com/PjdPzcs.png http://i.imgur.com/PjdPzcs.png As a Mozilla intern I've always thought that was funny.
- Fej 10y agoWait, I'm a young'un. How?
- ChrisArgyle 10y agoThe Mozilla Organization has a partnership with Yahoo! to make them Firefox's default search engine [1]. Firefox was created by the Mozilla Organization which was created by Netscape. Netscape was acquired by AOL in 1999 [2]. [1] http://www.zdnet.com/article/mozilla-strikes-firefox-search-deal-with-yahoo-ending-long-partnership-with-google/ http://www.zdnet.com/article/mozilla-strikes-firefox-search-... [2] https://en.wikipedia.org/wiki/Netscape https://en.wikipedia.org/wiki/Netscape
- grandalf 10y agoI'm hoping Yahoo's Smart TV platform business is sold to someone who will make it awesome. It has potential and a pretty massive installed base.
- _puk 10y agoI got the impression that Yahoo's Smart TV platform was outdated, and being eroded by Opera's HTML5 platform. Given that this is pretty much all that is left of Opera after the Chinese buyout [1] it may well be a chance for Yahoo to get back in the SoC game. 1: http://www.newsweb.no/newsweb/search.do?messageId=406030 http://www.newsweb.no/newsweb/search.do?messageId=406030
- branchless 10y agoMy requests: 1. don't touch yahoo finance 2. bring back pipes
- trequartista 10y agoDon't touch Flickr as well
- sdfjkl 10y agoI think it's a bit too late for that.
- rch 10y agoWhat's worthwhile about yahoo finance? Just curious...
- fma 10y agoFrom my stand point they have a free api to get her market data.
- RandomExamples 10y ago3. Don't touch DuckDuckGo either. Thanks.
- freddyc 10y agoI'd add 3. Fantasy Football
- Esau 10y ago"Verizon sees a complimentary set of businesses that could find a home alongside its AOL properties." This tells you everything you need to know, because AOL should have died years ago as well.
- empath75 10y agoWhat exactly do you think aol is?
- porsupah 10y agoFrom what I've read, it appears unclear as to what Yahoo defines to be its "core business". Are there any details on what specifically Verizon is seeking to acquire, and whether Flickr is included?
- hodder 10y agoMarissa Mayer is a terrible CEO. Unbelievable the amount of money she has been paid to flush the remainder of Yahoo down the drain with no strategy while employees suffer. Yahoo (net of BABA) is less than worthless.
- ssharp 10y agoAt the time of Mayer's hire, Yahoo had a pretty low chance at a highly successful turnaround. I think it's unfair to say she didn't have a strategy and that she purposefully let employees suffer. Whatever she did failed to turn the company around but that alone doesn't make her a terrible CEO.
- mc32 10y agoI know she's unpopular, but she's hardly the first one who tried righting that ship without success. I think she's stabilized it and made people believe there was a possibility in turning around, giving it breathing room more than the previous three. You have to remember that when she came on board, Y! was taking water fast. No one, no one could have saved it and made it relevant. I think she did a pretty commendable job trying.
- zamalek 10y ago> No one, no one could have saved it and made it relevant. Agreed. I simply can't understand why we keep flogging this dead horse, Mayer or Verizon, none of it makes any sense. Am I missing something regarding the true value of Yahoo!?
- toomuchtodo 10y agoI _believe_ the reason the horse keeps getting flogged is because a wide swath of HN doesn't believe Mayer had the skill set needed to make a real attempt to right Yahoo (and, arguably, her actions support that assumption). Yahoo never had a chance.
- fweespeech 10y ago> Agreed. I simply can't understand why we keep flogging this dead horse, Mayer or Verizon, none of it makes any sense. Am I missing something regarding the true value of Yahoo!? As a stand alone entity, Yahoo simply had no real chance. Their only path to relevance was a complete remodel of their priorities ~10 years ago. Verizon, honestly, doesn't make alot of sense but my guess is they think they can integrate it into their operations to make money. Idk how they would.
- hodder 10y agoMarissa Mayer is a terrible CEO. Unbelievable the amount of money she has been paid to flush the remainder of Yahoo down the drain with no strategy while employees suffer. Yahoo (net of BABA) is less than worthless.Hopefully this sad deal will give the employees some sustainability and hope, but I am doubtful.
- shiftoutbox 10y agoThis would be amazing if Verizon closed on this deal, and then said Everyone move to NJ/NY . The East Coast needs to get some tech people back from the West coast. With all of the empty realestate Verizon owns in NJ it would be a boon for the economy.
- 0xmohit 10y agoCurious what is Yahoo! worth sans stakes in Alibaba and Yahoo! Japan?
- komali2 10y agoYahoo! Taiwan as well. It's the primary buyer/seller platform, weirdly.
- jackgavigan 10y agohttps://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN686gOCiji1bQ-rsbnjtKD3oho/edit?usp=sharing https://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN68...
- tomjen3 10y agoWhat, other than some japenese websites and Alibaba does Yahoo own that is worth anything?
- 0xmohit 10y agoIt has employees as assets. And Mayer, of course.
- hacksonx 10y agoThat $1.1Bilion price tag paid for Tumblr is just over 10% of the indicated price tag. Maybe Tumblr are also good for something.
- jonknee 10y agoYou're joking right? They keep writing off Tumblr, it is worthless. Just 4 days ago: https://www.yahoo.com/tech/yahoo-reports-another-big-loss-212237743.html https://www.yahoo.com/tech/yahoo-reports-another-big-loss-21... > Yahoo also reported Monday that it's writing down $482 million in charges related to the declining value of Tumblr, the social-blogging service that Yahoo acquired for $1.1 billion in 2013. Combined with an earlier write-down of $230 million, that indicates Tumblr's value has plunged by almost two-thirds.
- toomanybeersies 10y agoThere is a certain irony reading about the downfall of Yahoo on Yahoo news.
- djstein 10y agotumblr :^)
- syntheticnature 10y agoOff-hand: Yahoo Fantasy Sports is very popular, considered by many to be the best online fantasy sports site. Yahoo Finance is popular. Yahoo Mail has a lot of people who would do anything to continue using it. Digging around a bit, here's what they consider to be their "core services" that are getting their focus lately: Search, Mail, Tumblr, Sports, News, Flickr, Lifestyle and Finance. You can argue more about some of those than others.
- colordrops 10y agoSo they dumped the great Fios on insanely incompetent Frontier, and are picking up the failing Yahoo. What's their strategy here?
- rayiner 10y agoIn a typical year (excluding the Alibaba sale or big write-down last year), Yahoo makes as much profit as Verizon's entire wireline unit.[1] Selling part of the FiOS network for $10 billion to buy Yahoo for less than $5 billion is a no-brainer. It'd be better to buy a healthier tech company, obviously, but Yahoo is what's on the market. [1] While costing about $4 billion a year to run, versus $35 billion a year for Verizon's wireline division.
- ep103 10y agoAdvertising. AOL owns, or owned, a very large number of programmatic advertising companies. Yahoo! plays in the same arena.
- deleted 10y ago[deleted]
- mathattack 10y agoThis certainly seems to make the most sense. It does seem like Verizon is chasing the past with this acquisition, going for Internet 1996 and Internet 2000 rather than the mobile future. (I don't buy Mayer's contention that Yahoo is now a mobile company)
- kartD 10y agoYahoo did serve one purpose, it was the exit system for a lot of almost successful startups. Hope that continues under Verizon, though I doubt it. On Mayer, well eh she put her hand up and suffered. but then Yahoo was pretty much past saving. Hopefully, she's learned from her mistakes and moves to something more productive.
- chrishacken 10y agoWhy would you hope that continues? They validated startups that probably wouldn't have been validated by any other means. Unless you're an investor, that's probably a bad thing, not a good thing.
- freehunter 10y agoIt's a good thing if you own or work for the startup. It gives you an exit when otherwise you would be bankrupt and unemployed.
- winstonewert 10y agoBut its a bad thing overall if the employees and owner of the startup were wasting their time and money producing a product that never showed value.
- 650REDHAIR 10y agoShowed enough value to be acquired...
- winstonewert 10y ago...by Yahoo, which in light of their current situation is not much of an endorsement.
- cft 10y agoThe macro economically productive "purpose" of a start-up is to make profit, not to "exit". Until this is understood and forced by the economy, the overall economic climate in the US will continue to deteriorate.
- finid 10y agoThat's just wow! Fifteen years or so from now, some company will likely be picking up Facebook on the cheap. By that time, Twitter will probably be history. Google? The wheel of life...
- socrates1998 10y agoThis isn't good for consumers. Verizon is looking to add web assets with a longer term strategy, locking in people to their web space. As in, two different data tiers, they family of businesses and everything else. If there were true net neutrality, the government would block this purchase.
- vthallam 10y agoI don't think they would have any regulatory challenge. Remember comcast invested in Vox media earlier? Not sure how will the net neutrality be affected with this acquisition, but this is mostly done to build a huge media/entertainment(Yahoo! + AOL) business which will be complementary to Verizon's current offerings.
- deleted 10y ago[deleted]
- Floegipoky 10y agoIs Verizon Wireless still injecting tracking headers into cellular data traffic? If so, how will these new acquisitions affect the way that these headers can be used?
- drdeadringer 10y agoI wonder what Jerry Yang thinks about all this. I still remember the "Go 3.0" marketing liner.
- utopcell 10y agoIt is deeply sad that there's even a chance that Yahoo will be sold for ~$5BN to Verizon, which bough AOL for $4.4BN, especially considering that AOL has 0.9% of the US web search traffic while Yahoo still has more than 10% and amazing agreements in place that allow it to show the best search results between Google and Bing. How is this maximizing value for shareholders exactly ?
- colechristensen 10y agoYahoo has been on sale for a long time, clearly there have been issues with buyers finding value. They probably have a point. People don't see growth in Yahoo. They were on top before Google (I remember Yahoo was _my_ choice for a long time) and it seems they've just been existing, coasting on brand recognition but not accomplishing much. It's easy to see a future where Yahoo only goes slowly downward.
- ArtDev 10y agoUgh, isn't there a better company out there to buy Yahoo?
- qaq 10y agoDo you really want verizon to buy a good company?
- mark_l_watson 10y agoI have mixed feelings about this. I still use Yahoo once or twice a week to read their news feed, and I am a long time Verizon customer (although my wife and I are considering saving a lot of money each month and switch to Google Fi when we need new phones). I would hope that a media company like Yahoo could have existed independently from a parent company.
- deleted 10y ago[deleted]
- bogomipz 10y ago"Ma Bell, proud owners of both AOL and Yahoo." Clinton running for president. You would be forgiven for asking if it was the 1990s. It's hard for me to be excited by any of this. Those are three really dull companies.
- IamFermat 10y agoWow, i gotta say this is like Time Warner/AOL. Perhaps the internet is more mature now to make this work but Im not holding my breath. How will they reconcile the 2 adtech stacks which are huge messes in and off themselves.
- paulbjensen 10y agoI can imagine 3 years from now tech journalists will be writing that "history repeats itself". I can foresee that 3 things will happen: - There will be a people drain from Yahoo. Anyone was is passionate about Yahoo will feel completely disenfranchised with being merged into a smaller competitor that is owned by a larger company. Some people will hold out for being made redundant in the hope of a good severance package, and some will simply stay regardless, but those who see what is happening will realise that Yahoo is over, and won't want to be a part of the frankenstein being assembled within Verizon. - Yahoo's main properties (Homepage, Weather, Finance, Mail) will survive, Flickr/Tumblr I don't know. Tumblr itself has suffered from the difficulties of merging into Yahoo's culture and way of doing things. Flickr was resurrected in some ways, but struggles from the difficulties that other web 2.0 brands have - how to stay relevant and interesting to consumers today when the industry has changed so much since their creation. - Mayer will go. She tried and she didn't succeed. She'll get a decent severance package, but Tim Armstrong will finally get what he's wanted for a long time. Whether he's able to successfully merge two large-sized businesses together I don't know, this is a different challenge compared to acquiring businesses like Goviral or Millenial Media, we're talking about a headcount of ~8000 employees, and there will be lots of duplicate roles. I don't expect the merger to go smoothly - I expect it to be a bit messy. Either way, the goal of creating a relatively strong #3 to Google and Facebook seems at this point a lost cause - both Google and Facebook have market valuations that dwarf what AOL and Yahoo were worth at the time of their merger, and given a signal of what we might see in the next couple of years.
- macspoofing 10y agoFor 3.5 billion (rumored price), I'm surprised Google wouldn't take a flyer on Yahoo.
- dragonwriter 10y ago> For 3.5 billion (rumored price), I'm surprised Google wouldn't take a flyer on Yahoo. If they anticipate substantial antitrust scrutiny of the deal (and I would think Google buying Yahoo! would have to in ways many other suitors would not), it might not be worth the purchase price plus the cost associated with the scrutiny.
- awqrre 10y agoSomewhat unrelated but: Since the Government is already tapping into wired and wireless networks without consent, it would be nice if they would take control of all ISPs... we would probably get better cellphone service at least.
- perseusprime11 10y agoI am hoping Verizon will change their logo after this aquisition. It looks ridiculous.. https://cdn0.vox-cdn.com/thumbor/zL414AMfclnMcwL59xa3ZTXrcDw=/3x0:1418x796/1600x900/cdn0.vox-cdn.com/uploads/chorus_image/image/47080648/Screen_Shot_2015-09-02_at_2.20.55_pm.0.0.png https://cdn0.vox-cdn.com/thumbor/zL414AMfclnMcwL59xa3ZTXrcDw...