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Verizon Buys Yahoo's Core Assets

ROBERT SIEGEL, HOST:

On today's All Tech Considered, the auctioning off of web pioneer Yahoo.

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SIEGEL: Verizon will buy Yahoo's core internet business for $4.8 billion. It is not the wedding of two companies meant to be together. It's more like a quick sale to the highest bidder. NPR's Aarti Shahani reports.

AARTI SHAHANI, BYLINE: To understand today's news, you have to look at Yahoo as one company with two parts. First, the stuff that ends in an exclamation point - Yahoo search, email, Yahoo Finance and sports. And the second part, which is worth many times more, is Yahoo's Asian investments. Namely, its massive stake in a Chinese company called Alibaba. The Yahoo board gave CEO Marissa Mayer marching orders - split up the two parts. Under today's deal, the first part goes to Verizon. And the Alibaba stake, along with a few other investments...

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MARISSA MAYER: These assets will continue to be held by Yahoo, which will change its name at closing.

SHAHANI: CEO Mayer speaking on an investor call this morning. For internet geeks, today marks the tragic end of a long and messy journey. But it's not a surprise end. Mayer spent much of last year trying to spin off the Alibaba stake. But regulators said she couldn't do it without paying taxes, as board member Tom McInerney explained on the call.

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TOM MCINERNEY: We've obviously gone to great pains to get to this point where we wouldn't have to do that.

SHAHANI: Many tech insiders have speculated about the fate of Mayer, a high-profile CEO who took over in 2012. If she leaves, even though she failed to turn Yahoo around she stands to get a severance package of nearly $55 million. It's not clear exactly what she'll do. Asked if she plans to join Verizon, Mayer gave a very qualified answer that is not a yes or a no.

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MAYER: You know, we - myself and the rest of the management team - we've really dedicated ourselves to the process of getting to this point.

SHAHANI: The latest mandate from her board was to get Yahoo to the point of splitting up.

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MAYER: That said, I plan to stay. I love Yahoo, and I’m excited to see it into its next chapter. And for the immediate future, what that means is I have two priorities.

SHAHANI: Those priorities are making sure the deal closes and making sure the stake in Alibaba and other Asian assets are safe and sound. Her short list did not include staying a couple years to make sure Yahoo's internet business grows in this next chapter. Neither Yahoo nor Verizon can spell out how they'll work together. Yahoo leaders say they were so focused on managing an auction with many bidders they didn't get to work out those details. A third player in the mix gives this insight.

TIM ARMSTRONG: You know, Yahoo is a very strong global brand and global company. And AOL is a global brand and global company.

SHAHANI: Tim Armstrong is the chief of AOL, which Verizon bought for roughly the same amount last year.

ARMSTRONG: And the combination of the two with Verizon really offers something that is unique in the marketplace.

SHAHANI: The mobile advertising marketplace. Google and Facebook are basically a duopoly in mobile ads. Google knows how to target ads because of search, Facebook because of what you like and share. Now, Verizon sees everything you do on your phone, whether you're opening a food app or a fitness app, where you are. That's powerful. While Yahoo has 1 billion monthly active users, it fell behind in mobile. Armstrong says Verizon could help pick up the slack.

ARMSTRONG: You know, if you're going to deal with human beings in the future, you're going to have to deal with their second brain, which is their mobile phone. And we own a lot of second brains.

SHAHANI: The parties expect the deal to close by the first quarter of next year. Aarti Shahani, NPR News, San Francisco. Transcript provided by NPR, Copyright NPR.