Verizon completes $4.48 billion purchase of Yahoo, ending an era

SAN FRANCISCO — Goodbye, Yahoo. Hello, Oath.

Verizon Communications, the wireless powerhouse that was a cluster of local phone companies when two Stanford University graduate students began compiling the Yahoo web directory in 1994, completed its purchase on Tuesday of Yahoo’s internet business for $4.48 billion.

Yahoo, which once had a market value of $125 billion, will be combined with AOL, another faded web pioneer it bought in 2015, into a new division of Verizon called Oath.

Oath, headed by AOL’s chief executive, Tim Armstrong, will have about 1.3 billion monthly users, and Verizon hopes to use its range of content and new forms of advertising to attract more viewers and marketers as it competes against Google and Facebook. The company also intends to cut costs, with plans to lay off about 2,100 people, or about 15 percent of Oath’s staff.

Oath’s strategy will be to place the same content — whether articles, videos or ads — in multiple locations to reach the widest possible audience, said Marni Walden, the Verizon executive vice president who oversees its global media businesses.

“I think of the Oath business almost like a shopping mall,” Ms. Walden said in a phone interview from Yahoo’s Sunnyvale, Calif., headquarters, where she had just addressed employees of the two companies.

Nike sells its shoes at Macy’s and Foot Locker, she said. “At each one of those storefronts, you’re getting a different type of customer.”

In the case of Oath, that means content from some of its media properties like HuffPost and TechCrunch will soon appear on Yahoo sites and mobile apps, and vice versa. “There is a tremendous opportunity to increase viewership of some of these brands,” Ms. Walden said.

Verizon will also start pushing Oath apps onto its wireless phones, either preinstalled or added by representatives at Verizon Wireless stores when customers buy a phone. “You’ll start to see more and more of these experiences — Yahoo sports, finance, news — not just as a preload on the handset, but integrated in a very thoughtful way,” she said.

Yahoo’s chief executive, Marissa Mayer, resigned from the company after the deal closed. Although she failed to turn around Yahoo’s long-struggling business, she was well compensated for her five years leading the company, earning $246 million, or an average of $1 million a week, based on the company’s final stock price. During her tenure, Yahoo’s share price more than tripled as the value of its Asian investments soared.

Yahoo’s stockholders will retain shares in a new company called Altaba that will own its $52 billion stake in Alibaba Group and its $9 billion stake in Yahoo Japan.

“Looking back on my time at Yahoo, we have confronted seemingly insurmountable business challenges, along with many surprise twists and turns,” Ms. Mayer wrote in a farewell note to employees. “Working with you has made my time as C.E.O. nothing short of a privilege.”


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