Verizon was declared the winner of a $4.8 billion acquisition of Yahoo as part of the telecommunication giant's effort to build a new mobile and online advertising powerhouse on Monday.
Verizon's colossal purchase of Yahoo underscores the need for dated platforms to adapt to a modern mobile format. While Yahoo was once regarded as a major competitor to Google, the search engine failed to change with the times. By becoming part of Verizon, Yahoo is in a better position to adjust - but only with the proper leadership. Google and Facebook were on the verge of making the service irrelevant because both Silicon Valley titans understood the importance of constant reinvention - a business model Yahoo failed to grasp. If Verizon's overhaul is successful, web users can look forward to a new era of competition.
Yahoo Joins AOL In The Verizon Family
Under the acquisition agreement with Verizon, Yahoo shareholders will be left with $41 billion in investments the Chinese company Alibaba. The sale comes after years of strife as the former website directory failed to compete with newer tech behemoths such as Google and Facebook.
Verizon's purchase of Yahoo was initially met with praise from market analysts who believed the acquisition will reverse years of stagnant innovation. Sprint CEO Marcelo Claure disagreed, saying the purchase of content creators by telecoms never work out.
"History has proven that every single one of them has failed," he told reporters.
The sale comes a year after the telecommunications giant purchased AOL for $4.4 billion, suggesting Verizon was eyeing more digital advertising opportunities. Experts believe the same rationale lead to the Yahoo acquisition.
Yahoo was founded as a website directory in 1994, later evolving into one of the most-used search engines and reinventing itself again as a news service. Its content has been traditionally free to consumers, conforming to a Silicon Valley industry standard to fund operations through advertising rather than through paid user subscriptions.
New York Times marks the end of an era
Yahoo was the front door to the web for an early generation of internet users, and its services still attract a billion visitors a month. But the internet is an unforgiving place for yesterday's great idea, and Yahoo has now reached the end of the line as an independent company.
Financial Review plays up the symbolism
A business that makes most of its money from search and display ads on desktop computers is reportedly being acquired by a business that makes most of its money from mobile phone connections. The symbolism is perfect: The mobile reigns supreme over the desktop. Could there be a more fitting illustration of the era we are living in?
Business Insider says the sale is good for small businesses
Verizon's $4.83 billion deal for Yahoo's core internet business is huge news for small banks. The hotly anticipated deal is one that every firm will have been scrambling to get a piece of. In the end, the boutique firms LionTree Advisors, Allen & Company, Guggenheim Securities, and PJT Partners were the big winners.