Verizon has entered the winning bid to purchase Yahoo’s internet business. The announcement is expected to come later today, but early reports indicate that Verizon will be paying some $4.8 billion for the internet giant’s core assets.
Verizon had originally bid $3 billion for Yahoo, but that did not include buying its real estate. The most recent bid managed to beat offers that mainly came from private-equity firms.
On the surface, it is not difficult to see why Verizon would want Yahoo’s assets. The company has been working on building a larger internet advertising portfolio as of late; and has already purchased AOL. Combining the data from AOL and Yahoo would likely give Verizon a substantial base from which to expand its advertising offerings.
The goal, it seems, is to build enough of a portfolio to challenge both Google and Facebook. Despite this, it would still be an uphill battle for market share. Yahoo only accounts for 3.4-percent of the market; while AOL has an even smaller 1.8-percent.
The sale of Yahoo looks confirmed, but there is still a lot for the company to do. While the core business is going to Verizon, there is still the matter of Yahoo’s shares in Yahoo Japan and the Alibaba Group. Neither of these entities are included in the sale to Verizon, and could likely be sold off.
[Source: Wall Street Journal]