Verizon Closes the Deal with Yahoo.
Marissa Mayer Steps Down
The USA major wireless carrier and TV and internet service provider acquires the greatest name of the past pre-Google era – Yahoo!
Yahoo Finance, Yahoo Sports, Yahoo Mail, Yahoo Search and other services by the Sunnyvale tech company will join AOL brands such as the Huffington Post under a new title – Oath. Tim Armstrong, former CEO of AOL, who is to head the subsidiary, has hinted before that the new brand name would consist of a four-letter word. Oath seems to seal the intentions of both parties.
Verizon pays $4.48 billion for acquisition of Yahoo, but Marissa Mayerm, Yahoo CEO since July 2012, has to step down. $23 million payment she gets as a ‘golden parachute’ according to the Securities and Exchange Commission must sugar the pill though.
The new CEO team includes: AOL president and former Yahoo executive Tim Mahlman (head advertising technology), Yahoo engineer Atte Lahtiranta (tech department) and Verizon’s Ralf Jacob (digital media). Tim Armstrong takes the helm. The Yahoo board member Thomas McInerney will take the CEO office of Altaba – the former Chinese e-commerce company Alibaba and Yahoo Japan.
Verizon has been planning to buy Yahoo’s core internet business for almost a year starting last July. Coincidentally or not, soon after the intentions of purchase were announced, Yahoo revealed it survived two serious data breaches in 2013 and 2014 compromising more than 1 billion user accounts. This decreased the final acquisition price by $350 million.
Yahoo Mail, Yahoo Search and other services such as Tumblr and Flickr will remain. If anything, their presence in the mobile segment of the Internet will be enhanced. We expect Verizon subscribers to get some privileges in using these services. And with the Verizon and AOL audience Yahoo can get the boost it needed so badly since Google arrived. Perhaps, this is the reason why the former CEO was dismissed. With all due respect Ms. Mayer failed to bring the company to the new level.
This shortsightedness can cost more than 2,000 Yahoo employees their job, because the integration is rumored to slash 2,100 jobs
As for the new brand ads and strategies we have to wait until the next week. Right now Oath is a subject to numerous jokes online.
Obviously, Oath has to face numerous challenges. It now includes two mail services: Yahoo Mail and Alto. Both have to compete with Google Mail. And not so much with Google Mail itself but also with the integrated Google Docs.
In the search engines market Yahoo has to stand against the newborn (or not so newborn, it depends) Bing. The problem here is that Bing is incorporated as the search engine by default into Microsoft products like Edge and Skype. Yahoo is not incorporated into anything at all and remains the Web-based search engine. Ok, a decade and a half ago Yahoo was a role model sporting a mail service, a weather service and a news service, but it stood still while Google moved forward and developed and launched the browser of its own name and even the OS.
I doubt Oath would invest in creating something like this. But perhaps, Yahoo can create some mobile browser. It should be small, quick and integrated with all the Yahoo and AOL services and Facebook. And of course we wouldn’t like to lose great projects like #BuiltByGirls and Makers.