Verizon’s buy of Yahoo will fuel growth of new mobile video, ad business

By Jim O'Neill on Jul 25 2016 at 7:30 AM
Verizon’s buy of Yahoo will fuel growth of new mobile video, ad business

Verizon, the odds-on favorite to buy Yahoo, today finalized the deal, paying $4.83 billion for Yahoo’s Web assets and in the process expanding its digital advertising business.

The all-cash deal gives Verizon real estate and Web assets, but doesn’t include some intellectual property, which Yahoo plans to sell separately, nor does it affect Yahoo’s Alibaba and Yahoo Japan holdings, which are worth an estimated $40 billion, according to Bloomberg.

Yahoo is the second big Internet company Verizon has purchased; it bought AOL for $4.4 billion last year and is expected to close in the first quarter of 2017.

Verizon, which at one point rapidly gained share in the pay-TV sector, has been scaling back its FiOS TV service and looking instead to mobile delivery of TV services. It’s the largest wireless operator in the U.S. and is aggressively looking to mobile services, especially video, to supplement – and likely eventually replace – revenue from its traditional pay-TV business.

The Yahoo acquisition allows it to leverage data from both Yahoo and AOL to offer better targeted advertising to its 100 million wireless customers.

The mashup strengthens Verizon’s place in the digital ad market, as it will now have access to programmatic ad tech from BrightRoll and Flurry and to the more than 1 billion monthly users Yahoo still reaches.

"Yahoo gives us scale that is what is most critical here,” Marni Walden, who is head of product innovation and new business at Verizon told CNBC. "We want to compete and that is the place we need to be."

Added AOL Inc. Chief Executive Officer Tim Armstrong, “We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth. “Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers.”

Top of Form

Stay tuned.

Follow me on Twitter @JimONeillMedia and on LinkedIn

READ THESE NEXT

AMC takes a piece of Funny or Die as it looks to grow audeince
Mergers & Acquisitions, Content
AMC takes a piece of Funny or Die as it looks to grow audience
Nov 16 2016 5:45 AM

AMC has taken a minority share in Funny or Die, the online comedy channel, in a deal that aims to leverage the strength that AMC-owned IFC has in the linear space and Funny or Die has online and in social media.

AT&T looks to build a giant, but faces regulatory hurdles in Time Warner buy
Mergers & Acquisitions, Pay TV, Content
AT&T looks to build a giant, but faces regulatory hurdles in Time Warner buy
Oct 24 2016 7:45 AM

Another blockbuster deal in the media landscape means another battle with regulators after AT&T this weekend agreed to acquire Time Warner for $85.4 billion.

Report: AT&T deal for Time Warner could happen this weekend
Mergers & Acquisitions, Pay TV
Report: AT&T deal for Time Warner could happen this weekend
Oct 21 2016 5:30 AM

Talks between senior executives of AT&T and Time Warner are spurring takeover talks that bumped Time Warner stock nearly 5% Thursday and nearly 10% Friday after a report that a merger could come as soon as this weekend.

Disney BAMTech investments puts it smack in the middle of the OTT race
OTT, Mergers & Acquisitions
Disney BAM Tech investment puts it smack in the middle of the OTT race
Aug 10 2016 6:00 AM

No, the world hasn’t ended, but hell apparently, has frozen over. ESPN is going over the top, direct to consumers, something the pundits said would never happen.