Is Verizon Interested in Yahoo Internet Businesses?

CFO Fran Shammo says Verizon will look into it if there's a strategic fit and value can be added.
Katie Kuehner-HebertDecember 8, 2015

Verizon Communications may consider buying Yahoo’s core business, which includes Yahoo Mail, its news and sports sites, and its advertising technology, Verizon CFO Fran Shammo said on Monday.

“If we see there is a strategic fit and it makes sense for our shareholders and we can return value, we’ll look at it, but at this point it’s way too premature to talk about,” Shammo said, according to Reuters.

Yahoo’s “board and investors have not decided what they’re going to do with that asset,” said Shammo, who spoke at UBS’s annual global media and communications conference in New York City. “I think right now they are trying to figure out exactly what they are going to do.”

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Yahoo declined to comment to Reuters.

Yahoo is said to be weighing a sale of some of its core Internet businesses, such as search, media, and advertising, amid weaker-than-expected growth under chief executive Marissa Mayer, according to the Washington Post.

“Although Yahoo has been struggling to turn itself around for several years, the fact that its sites draw a tremendous number of visitors every month makes it an attractive target for would-be kingpins of Internet content,” the Post article said. “If Verizon gets more serious about buying Yahoo, the resulting deal could turn the telecom giant into a network/media hybrid similar to Comcast-NBCUniversal, which controls not only a portal to entertainment but also much of the actual entertainment itself.”

Verizon has already ventured in that direction this year by buying AOL, which owns the Huffington Post and major sites such as Techcrunch and Engadget.

“Using AOL’s substantial advertising technology, Verizon might even be able to supercharge the revenue generated by all those Yahoo visitors in a way that Yahoo perhaps doesn’t,” the Post article said.

Verizon might finds Yahoo’s sports, financial, and general news sites, as well as its advertising technology including BrightRoll, attractive at the right price, according to Bloomberg. Impediments to a sale of Yahoo include the fate of its stake in Alibaba, the Chinese e-commerce giant, and the tax implications of a sale of that unit.

In a bid to find new growth businesses, Verizon this year started go90, a free mobile video service with content aimed at teens and Millennials that uses AOL’s ad-insertion technology, Bloomberg noted.

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