Yahoo’s sale to Verizon, which created waves of frenzy in the tech space last year, was slated to close officially in the middle of June. The deal, worth USD 4.48 billion was dubbed by industry experts to be one of the most somber deals of recent times. With the sale’s closure looming near, analysts have been wondering about the impending changes that the tech sphere is likely to face in the ensuing years.
As per earlier reports, in February 2017, Verizon and Yahoo had agreed to reduce the contract cost by USD 350 million after Yahoo disclosed two vital data security breaches. One of those security breaches had severely affected nearly 500 million internet users, while the other one had affected more than 1 billion online user accounts.
The acquisition agreement between the two internet giants is predicted to officially close on 13th June 2017 as per the terms and conditions. After the completion of the acquisition, AOL, a division of Verizon communications, and Yahoo will jointly form an online firm named as Oath under the ownership of Verizon. As is the case with major acquisitions, the latter is expected to slash nearly 15% of the AOL-Yahoo staff – which is approximately equal to around 2,100 employees, from this joint venture.
Industry experts have long since predicted that Verizon has acquired Yahoo to gain a competitive advantage over its business rivals such as Google Inc. and Facebook. It is expected to make use of Yahoo’s internet tools to further boost its revenue. The main objective of Verizon’s purchase is led by its challenge to the duopoly established by the internet giants such as Facebook and Google across the areas of digital marketing & online branding. It intends to become a strong contender in these fields and compete not only against these two huge web giants, but also the new players who have already invested in the emerging business of digital marketing.
By adding Yahoo’s most popular websites as well as a large number of online users to its highly flourishing media business, Verizon is most likely to become a third strong preference for the digital business promoters other than internet platforms such as Google and Facebook to advertise their business. The acquisition of Yahoo’s internet assets will facilitate Verizon to make sales promotions on Yahoo sites and share the data about the number of visitors to these sites.
The acquisition will also help Verizon to track personal information about the mobile users which will assist AOL to target ads and expand the global reach of Verizon’s online business. From its antics, it seems as though Verizon’s first policy post the acquisition is to slash more than 2,000 jobs for cost-cutting purposes and then enhance its brand value through large-scale expansion of its digital media business.
Shikha develops content for Market Size Forecasters. An electrical & electronics engineer by education, she has prior experience in content & technology writing, content marketing, market research, and business development domains. Her other interests include sketching, reading, and singing....