Internet news giant Yahoo lost its hoot factor shortly after Marissa Mayer took over in 2012. Going ahead, through a serious of unforeseen events, it lost market and mindshare as well. Not that it mattered in the end. On Tuesday, Chief Executive Officer Mayer exited the company with a $23-million payout after leading US telecom Verizon completed a $4.48-billion acquisition of Yahoo's core Internet business.
Around 2,100 employees are expected to be pinkslipped at Yahoo and AOL, a division of Verizon after the merger -- announced last week and closed on Tuesday --, between the two companies.
Reuters said that the Yahoo deal came after activist investors led by Starboard Value LP lost faith in CEO Marissa Mayer and forced what became a protracted sale process.
From Verizon's point of view, the deal is purely driven by data prospects from Yahoo-owned websites which have more than 200 million unique monthly visitors. Verizon is looking to combine this data with data on 150 million unique monthly AOL users and its own user base of over 100 million wireless subscribers to offer more targeted services for advertisers. Verizon will also leverage the merger with Yahoo to boost its presence in the mobile and online video space against the likes of Google and Facebook.
Yahoo's assets, which include Yahoo Finance, will be combined with AOL brands such as the Huffington Post under a new subsidiary called 'Oath'. Tim Armstrong, former CEO of AOL, will head the subsidiary, which houses more than 50 media and technology brands, said a CNBC report on Tuesday.
In April, had Armstrong named his leadership team for Oath. AOL president and former Yahoo executive Tim Mahlman will head advertising technology, Yahoo engineer Atte Lahtiranta will lead tech and Verizon's Ralf Jacob will oversee digital media.
Yahoo's filings with the Securities and Exchange Commission say that Mayer's "golden parachute" would amount to more than $23 million.
Verizon had announced plans to buy Yahoo's core Internet business in July last. After the deal was announced, Yahoo disclosed that it had discovered two data breaches in 2013 and 2014 affecting more than 1 billion user accounts.
The two companies then agreed that the final acquisition price would be $350 million less than the original offer of about $4.8 billion.
The deal ends Yahoo as an operating company and leaves it with its stake in Chinese e-commerce company Alibaba and Yahoo Japan, its cash, convertible notes, certain minority investments, and a non-core portfolio of patents called Excalibur. These assets will be renamed Altaba. In March, Yahoo said board member Thomas McInerney will serve as Altaba CEO.
