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Verizon considers buying Yahoo's internet business

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December 10
10:15 AM 2015

Buying Yahoo seems to be a pretty good option for Verizon, as apparently wants to be an owner of all the old school internet portals.

According to Reuters, Verizon Communications Inc is the No. 1 U.S. wireless carrier company. On December 7, its finance chief, Fran Shammo revealed that they have a deep interest in purchasing Yahoo Inc's core business. The categories included are advertising technology, Mail, its news and sports sites.

On Monday at the UBS annual global media and communications conference in New York, Shammo announced the company's intentions, as mentioned by CNBC. Yahoo considered its decision and for that on Friday, the company's board met on the third and final day of meetings. Multiple options were discussed and considered regarding company selling it's under pressured Internet business.

Chief Executive Marissa Mayer has been struggling since long in order to keep the financially pressured company in shape but faced multiple failures with minimal results. Yahoo's search and display ad businesses has been facing constant decline and has in turn affected the company drastically as it holds major percentage share of company's total revenue generated.

Last month, an activist investor Starboard Value LP advised Yahoo to halt its planning to do investment in Alibaba Group Holding Ltd. The reason was quite appropriate as the company was already facing downfall and it had to consider the tax applied amid the process of participation. Instead, the company was compelled to sell its core business.

Verizon purchased AOL for $4.4 billion, as reported by Forbes. When Yahoo announced to sell its business, Verizon quickly stepped forward with an intention to buy it.

Yahoo CEO, Marissa Mayer took the decision due to declining phase of company's media, search, and advertising site. Additionally, Comcast, Disney, AT&T, and CBS are facing downfall too.

Verizon CFO Fran Shammo's comments today at the UBS Global Media and Communications Conference, "And if we see there is a strategic fit and it makes sense for our shareholders and we can return value, I mean we'll look at it, but at this point it's way too premature to talk about that one... All I can say is we don't know what Yahoo's board will decide. It's too early to know,"

Citi analyst Mark May believes that it is "a viable and attractive option" for Yahoo to sell its core business is  for Yahoo. "Not only could this outcome be a more effective way of unlocking value of its stake in Alibaba, but also the core Yahoo! business could achieve a higher value (e.g., 5-6x forward EBITDA or $3.4 - 4.1bn EV) than what is currently implied (i.e., ~2.5x forward EBITDA or $1.7bn EV) given its scale and strategic value to what we believe is likely a number of potential buyers," he continued. 

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