One of the most important companies of the first dot-com boom, Yahoo, has reached the end of the road as an independent entity. Verizon Communications on Monday said it will acquire Yahoo’s operating business for about USD 4.83 billion in cash.
According to technology experts, the deal represents a stunning decline for a company that was valued at more than $100 billion at its 2000 peak. Yahoo was never really able to adapt its technology and culture for a post-2000 internet that was focused on social media and mobile devices, and so it steadily fell behind rivals such as Google and Facebook.
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), it said in a statement.
The deal with Verizon, which is subject to approval by Yahoo’s shareholders, regulatory and other approvals, is expected to close in the first quarter of 2017. Till then, Yahoo will continue to operate independently, offering its products and services to users, advertisers, developers and partners.
“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,” Verizon Chairman and CEO Lowell McAdam said.
Founded in 1994 by Stanford graduate students, Jerry Yang and David Filo, Yahoo was one of the last independently operated pioneers of the web.
While many tech companies like web browser maker Netscape, never made it to the end of the first dot-com boom, Yahoo managed to grow from being a directory of websites to offering searches, email, shopping and news.
Yahoo has a global user base of over one billion monthly active users, including 600 million monthly active mobile users, through search, communications and digital content products.
Yahoo chief Marissa Mayer, who joined Yahoo four years ago, failed to halt its decline as the company lost ground to larger rival Google. Mayer said the company “that has changed the world” will continue to do so in combination with Verizon and AOL.