WEDNESDAY 27 JUL 2016 12:17 PM


Founded in 1994 and incorporated in 1995, Yahoo Inc., also known as Yahoo!, is an original pioneer of internet technology. By 1998, it was the most popular web portal used for gathering information, and helped define the very concept of a search engine.

Yahoo initially benefitted from investment in internet-based companies, dubbed the 'dotcom bubble', during the late 1990s. Its stock price grew at an unprecedented rate and the company was worth $118.75 a share on 2 January, 2000.

At its peak, the company as a whole had a value of around $125bn. However, in following years, the company was hit with a number of issues brought about by increased competition and advancements in internet technology.

In 2008, tech giant Microsoft bid $45bn to acquire Yahoo, in an offer famously rebuked by its co-founder, Jerry Yang.

But during the last financial quarter of 2016, Yahoo lost $440mn in revenue and has now ended its run as an independent company. The company has been acquired by US-based telecommunications firm, Verizon, in a deal worth $4.83bn – almost 10% of what Microsoft offered in 2008.

Verizon hope this latest acquisition will turn round the ailing fortunes of a once-revolutionary internet company, through investing in the future of the digital media industry. During an interview with the Wall Street Journal, Lowell McAdam, CEO and chairman, Verizon, speculated that the digital media industry alone could be worth $180bn by 2020.

The acquisition of Yahoo and its one billion monthly active users might also help Verizon’s own ailing revenue stream. When paired with the 113mn Verizon users, addition of one billion new users, as well as investment in its lucrative news, finance and email streams, may recharge Verizon’s dropping quarterly profits.

Verizon also intends to invest in advertising, marketing and optimising services for smartphones, as media services become increasingly reliant on this platform.

In 2015, Verizon also acquired mass media corporation, AOL. It is expected that Yahoo will be integrated with AOL, to continue its investment in global, premium brands.

In a press release, McAdam says, "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."

Marissa Mayer, CEO of Yahoo, says, “Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL. The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo.”

Mayer continues, “This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social."

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