Verizon plans to buy Yahoo for $4.83 billion in cash, the company announced Monday. Yahoo operated independently for 21 years, but has struggled in recent years to make money and battle falling stock prices. While the buyout isn't entirely unexpected (it had been rumored for a while), it does have some pretty significant effects you should know about.
But first off, the deal likely won't be finalized before early 2017, according to Reuters. Until the deal is approved by regulators and shareholders, Yahoo will keep operating independently. In a statement reported by The New York Times on Monday, Yahoo's CEO, Marissa Mayer, said that the deal "is an important step in our plan to unlock shareholder value for Yahoo."
Once the deal is complete, though, it'll mean big changes for more than just Yahoo and Verizon investors. We've broken down what you need to know.
1. Verizon customers will likely have more services available to them.
The New York Times explains that Verizon "plans to combine Yahoo's operations with AOL." Verizon bought AOL last year for $4.4 billion. After the deal, Verizon will be able to "use Yahoo's vast array of content and its advertising technology to offer more robust services" to its customers, The Times notes. Reuters also notes that the deal will allow Verizon to use Yahoo's ad technology tools, as well as its messenger, mail, and search assets. Both companies declined to comment to The Times on the deal, though, so exactly what those services will include for Verizon subscribers remains to be seen (perhaps it's still yet to be decided). Still, the fact that Verizon is continuing to expand its digital offerings is a huge deal.2. It marks the end of an era.
Yahoo was one of the giant names of the dot-com boom in the '90s. It was hot shit twenty years ago — even ten years ago. But since the web transitioned to mobile, Yahoo got left behind. It tried to make acquisitions to stay relevant, and even put out some really good mobile apps to join the fray, but its efforts were either too little, too late, or not enough in the first place. In a way, the company's acquisition feels like a final tombstone for a bygone internet era.3. It creates a big question mark for Marissa Mayer.
And then, of course, there's Yahoo's boss. The deal also has serious implications for current CEO, Marissa Mayer. "I love Yahoo, and I want to see Yahoo into the next chapter," Mayer said in a CNBC interview Monday. But The Times reported that Mayer "is not expected to join Verizon," and that she could receive roughly $57 million in severance, according to data from compensation research firm Equilar. Mayer is one of the few female leaders in Silicon Valley. If she doesn't continue with Yahoo, what will she do next? Will she helm a new company? Head back to her old stomping grounds at Google? Or take a break and embrace motherhood and family life? Whatever she does will surely have big implications on the tech world.AdvertisementADVERTISEMENT