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Job cuts are in the offing as Yahoo CEO Marissa Mayer departs.
Verizon finally completed the acquisition of Yahoo’s core Web assets on Tuesday, heralding the departure of the latter’s CEO, Marissa Mayer, and ending a long-running saga during which the deal nearly fell apart altogether.
As previously disclosed, Yahoo will be combined with AOL – which Verizon acquired in 2015 for $4.4 billion – to form a new business called Oath, which will be part of the U.S. telco’s media and telematics division. The remaining parts of Yahoo will become an investment company called Altaba.
"The close of this transaction represents a critical step in growing the global scale needed for our digital media company," said Marni Walden, VP of media and telematics at Verizon. "The combined set of assets across Verizon and Oath, from VR to AI, 5G to IoT, from content partnerships to originals, will create exciting new ways to captivate audiences across the globe."
Oath will be led by former AOL chief executive Tim Armstrong.
"We’re building the future of brands using powerful technology, trusted content and differentiated data," Armstrong said. "We have dominating consumer brands in news, sports, finance, tech, and entertainment and lifestyle coupled with our market leading advertising technology platforms. Now that the deal is closed, we are excited to set our focus on being the best company for consumer media, and the best partner to our advertising, content and publisher partners."
The completion of the transaction marks the departure of Yahoo CEO Marissa Mayer, who tried to inject new life into the company with a multi-billion-dollar spending spree on dozens of online social media and content companies, from the high-profile, such as Tumblr, to the obscure, such as email services provider Xobni. The strategy did not translate into a meaningful turnaround in Yahoo’s fortunes, however.
"Verizon wishes Mayer well in her future endeavours," Verizon said.
Mayer might not be the only one out the door; recent reports claimed that somewhere between 1,000 and 2,100 jobs will go across Yahoo and AOL, as Verizon seeks to eliminate duplicate roles.
Verizon originally agreed to acquire Yahoo’s Internet business in July 2016, in a deal valuing the assets at $4.83 billion. However, revelations about major cyberattacks suffered by Yahoo before the deal was struck cast doubt over whether the transaction would go ahead.
The two sides eventually struck a revised deal under which they agreed to share certain legal and regulatory liabilities stemming from the hacks. The purchase price was also reduced by $350 million.
Yahoo shareholders voted in favour of the Verizon deal last week.
