Verizon Communications Inc completed the acquisition of Yahoo Inc, after closing a deal worth $4.48 billion, the company stated on Wednesday. The company plans on merging Yahoo with AOL, which it bought two years ago for $4.4 billion, to form a new venture called Oath. Verizon is an American-based company which operates a wireless network. It has 11.26 million retail connections across the US.
So what is Oath?
Oath will consist of services from both Yahoo and AOL. Yahoo, which was once worth more than $100 billion, is a tech pioneer with content brands in categories such as sports, finance and news. The 21-year-old company also has one of the most popular e-mail services in the world with around 225 million monthly active users.
AOL, originally known as American Online, is a media technology firm which has acquired over 50 brands including Huffington Post, TechCrunch, Engadget and Tumblr. Oath, on combining the media and technology resources of both firms, boasts of being able to reach nearly a billion people worldwide.
“With a house of brands as diverse as ours, we wanted a name that was values led – one that honoured our ultimate commitment of Building Brands People Love,” a statement from the company reads on its website.
Lowell McAdam, Verizon chairman and CEO, said in a statement last year: “Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers. 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.”
When will Oath launch?
Oath is expected to launch this summer. The merging of Yahoo with AOL will be completed under the guidance of Marni Walden, executive vice producer and president of the product innovation and new businesses organisation at Verizon.
Who heads Oath?
Tim Armstrong, who was heading AOL when it was bought over by Verizon, is the CEO of Oath. In a statement, he said, “Now that the deal is closed, we are excited to set our focus on being the best company for consumer media, and the best partner to our advertising, content and publisher partners,” reported news agency Reuters.
Nearly 2,000 people are expected to lose their jobs with the merging of the two businesses, as Verizon is looking to curb expenses and overlapping job profiles. Through Oath, Verizon hopes to compete with digital media giants Facebook and Google.
What happens to Yahoo?
On Verizon’s acquisition of Yahoo, it’s CEO Marissa Mayer stepped down from the company citing the “inherent changes” to her position. In an email to the company’s employees, she added, “I want all of you to know that I’m brimming with nostalgia, gratitude, and optimism.” Mayer walks away with a compensation package of nearly $127 million, including her severance package and stock awards.
On Friday, June 16, Yahoo will be renamed as Altaba Inc. The new venture is born from Yahoo’s stakes in Alibaba Group (15.5 per cent stake) and Yahoo Japan (35.5 per cent). The firm will also reportedly inherit $8 billion in cash from Yahoo. Thomas McInerney, a former board member of Yahoo, will become CEO of the company.
Yahoo’s stock will trade till Friday, after which Altaba’s will begin next Monday under the name ‘AABA’, reported AP.
(With inputs from agencies)