Significant changes await Yahoo, following agreement being reached for a $4.83 billion (€4.38 bn/£3.68 bn) takeover by US mobile network Verizon. The deal will see Verizon acquire Yahoo’s web properties, with the sale including news publishing, search, email, Flickr and Tumblr.
Following the deal, Yahoo – which was founded in 1994 and is a former giant of the internet – will no longer exist as an independent content producer or service provider. The company will be run from within Verizon’s existing operations.
According to Roger Entner, an analyst at Recon Analytics, Verizon is seeking to shift its business towards an area that has little regulation, by focussing on web publishing and services.
“It’s the continuation of an extension of Verizon’s strategy toward becoming a wireless internet player and a move away from [telecom] regulation for Verizon, into an unregulated growth industry,” Entner said.
The purchase of Yahoo will mean that Verizon has considerable control over some of the most high-profile content published on the web, as the US company also owns the Huffington Post and AOL.
As a result of the latest consolidation, one company will now have the potential to exert significant influence, with Verizon’s media properties being widely read around the globe.
For advertisers, Verizon’s digital properties could become attractive real estate, particularly given the large amount of data the company will be able to gather across its content and services. But concerns are likely to be raised about the prospect of one company having such significant global influence, while publishing content relating to politics, economics and finance.
There are also worries about the future of Yahoo’s social networks Flickr and Tumblr. It is less obvious how they fit in with Verizon’s strategy, as both outlets have offered limited capacity to generate advertising revenue.