Daily Management Review

The end of Yahoo! era


Yahoo! announced closure of the deal on sales of the company’s main business to Verizon Communications. The company will be renamed Altaba Inc. on June, 16. Since June 19, the company's shares will be traded on the Nasdaq exchange. Yahoo! Director Marissa Mayer will leave the post, having received a "golden parachute" of $ 23 million.

Yahoo via flickr
Yahoo via flickr
Verizon closed the deal to acquire Yahoo! for $ 4.48 billion. After the transaction, the company will retain a 15% stake in Alibaba Group Holding Limited, as well as a 36% stake in Yahoo! Japan Corporation.

June 16, the remains of Yahoo! will be renamed Altaba Inc., which will hold a 15% interest in Alibaba Group Holding Limited, as well as a 36% stake in Yahoo! Japan Corporation. Those departments of the previously powerful IT giant now belonging to Verizon will unite under the new brand Oath, which will also include AOL. "This means an end to the brand of one of the pioneers of the Internet era", wrote the New York Times.

Oath unit will include the resources of HuffPost, TechCrunch, Yahoo! Finance, Tumblr and business solutions in the field of advertising technology. The unified companies will benefit from Verizon's data on subscribers. Due to this information, advertisers looking for an alternative to Google and Facebook will be offered an improved service to select the target audience and conduct an assessment.

AOL CEO Tim Armstrong, who took over as CEO of Oath, said: "The whole company is focused on brands in the mobile sphere and the development of brands that supply content". Armstrong declined to comment on Mayer’s "decision-making process", saying only that the parties together created an organizational structure when working on the integration of one public company into another.

And this means that the period of the five-year management of Marissa Mayer is over together with the end of the Yahoo! era. Once the deal is concluded, she will leave her post, and a former financial director of IAC media holding, Thomas McInerney, will take her place. Mayer will receive $ 23 million as a severance pay. In addition, she owns Yahoo! securities package worth $ 186 million.

Oath plans to cut about 15% of the combined staff, or 2,100 from about 14 thousand employees. The reductions will mainly affect the administrative staff and will relate to recurring divisions and positions.

Armstrong had previously publicly stated that he was striving to ensure that by 2020, Oath has 2 billion customers against 1 billion at the moment. He also indicated a goal of achieving revenue exceeding $ 10 billion. However, the deal was completed later than planned, and Armstrong now stipulated a small possible "digression" from this specific period.

Verizon announced the purchase of the main Internet business Yahoo! for $ 4.83 billion in July 2016. In February 2017 Verizon and Yahoo! adjusted the terms of the deal, reducing its cost by $ 350 million.

This decline in price is explained by the fact that during the period of conclusion of the transaction Yahoo! twice announced a large-scale failure of the security system. The last time the company reported that in August 2013, data from more than 1 billion accounts were stolen. After that, Bloomberg, citing informed sources, said that Verizon is exploring the possibility of reducing the purchase price of Yahoo! or even a complete rejection of the transaction.

source: nytimes.com

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