Yahoo Bought by Verizon: 3 Key Facts to Know About the $4.83 Billion Deal

Yahoo Bought by Verizon: 3 Key Facts to Know About the $4.83 Billion Deal
Source: AP
Source: AP

Verizon, the largest telecom company in the United States, has announced it will acquire technology giant Yahoo, months after bidding began

The price — $4.83 billion — suggests something of a fire sale: As recently as 2007, Yahoo entertained, and turned down, acquisition offers as high as $44.6 billion. And even that marked a decline from valuations during the peak of the dot-com bubble.

Here are three crucial takeaways about the acquisition.

Verizon's in it for the eyeballs

The $4.8 billion price tag includes all of Yahoo's content, search, media properties, and its headquarters. Some of Yahoo's other assets — most importantly, the company's Asian businesses — will be spun off into an independent company.

Verizon has cited a desire to grow its media business as a top motivation for the deal: Last year it bought AOL, which owns the Huffington Post and TechCrunch. Despite declining dominance, Yahoo still has about a billion users, in great part thanks to the tech company's finance and sports publications. 

Yahoo! CEO Marissa Mayer tried to turn the company around by focusing on mobile, but it may have been too little, too late.
Source: 
Julie Jacobson/AP

Yahoo is the third largest digital advertising company by market share, but it makes far less money than its competitors (actually, it often loses money). 

There may be lots of layoffs

The fact that Verizon bought Yahoo so soon after its acquisition of AOL suggests the new purchase is a logical extension of the prior deal; Verizon is building out dominance in media and ad sales. Of course, this means there could be redundancies: Someone is going to have to figure out what to do with Yahoo's mammoth staff, which includes about 9,000 people including contractors.

Earlier this month, Yahoo posted steep losses, with revenues dropping 20%. Those losses and the size of Yahoo's staff together suggest layoffs could number in the thousands.  

The company will be integrated into AOL under CEO Tim Armstrong, who will have to find a way to preserve Yahoo's reach without spending much cash. 

No matter what happens, Marissa Mayer gets paid

One of the biggest remaining questions is the fate of Yahoo's CEO Marissa Mayer. 

The Google alumna took great pains to reinvigorate the company: Buying Tumblr for $1.1 billion, hiring veteran journalists like Katie Couric, and re-vamping Yahoo's hiring process. 

However she also came under fire for high spending and lavish parties as the company declined, with some dubbing her a "Marie Antoinette" of tech. 

Before you worry too much about her future, if Mayer doesn't join the newly revamped company, her severance pay is expected to top $50 million

Read more:
• What Is a "Good" vs. "Bad" Credit Score? Here's How to Know If Your Score Is High Enough
• Dollar Shave Club Is Worth a Billion Dollars Even Though It Doesn't Make Razors
• Global Economic Growth Will Slow in 2016, Brexit Is to Blame, IMF Says

How much do you trust the information in this article?

James Dennin

James is a staff writer covering money and millennials. Send your tips and your money problems to jdennin@mic.com.

MORE FROM

The 7 best deals in America

If you want to stretch your dollar to its maximum possible extent, check out these seven great deals.

What to know about Uber's $15 forgotten item fee

Uber alternatives are out there, which won't charge you a fee if you left behind or forgot something in the car — and need it back from the driver.

Tips that pay off: Figure out what to do with your life

Not sure what really makes you tick? Here's how to step back and customize the perfect career plan for yourself.

Can you save money on a home by buying a foreclosure? 5 things to know

Real estate-owned properties — those in foreclosure — can sell for 20% below market value. But proceed with caution, as many require extensive repairs that add to their total cost.

7 unconscious mistakes that make you waste money on food

Save money by becoming more self aware; stop sabotaging your food budget, and get back on track.

7 slick moves to save big bucks on back-to-school costs

Planning to spend hundreds on back-to-school costs? Follow these simple tips and tricks to keep more money in your pocket.

The 7 best deals in America

If you want to stretch your dollar to its maximum possible extent, check out these seven great deals.

What to know about Uber's $15 forgotten item fee

Uber alternatives are out there, which won't charge you a fee if you left behind or forgot something in the car — and need it back from the driver.

Tips that pay off: Figure out what to do with your life

Not sure what really makes you tick? Here's how to step back and customize the perfect career plan for yourself.

Can you save money on a home by buying a foreclosure? 5 things to know

Real estate-owned properties — those in foreclosure — can sell for 20% below market value. But proceed with caution, as many require extensive repairs that add to their total cost.

7 unconscious mistakes that make you waste money on food

Save money by becoming more self aware; stop sabotaging your food budget, and get back on track.

7 slick moves to save big bucks on back-to-school costs

Planning to spend hundreds on back-to-school costs? Follow these simple tips and tricks to keep more money in your pocket.