Yahoo has agreed to sell its core internet operations and land holdings to Verizon Communications for $4.8 billion, reports the Wall Street Journal. Post the sale, the company will retain its investments in Alibaba as well as Yahoo Japan and a small portfolio of patents.
Yahoo will also separately auction around 3000 patents which it expects will fetch more than $1 billion. Note that at its peak in 2000, Yahoo was valued at over $125 billion. As of now, the company is overall valued at around $36 billion, including holdings in Alibaba and Yahoo Japan. Current CEO of Yahoo Marissa Mayer is not expected to join Verizon.
Sale of Alibaba assets: In April this year, Yahoo said it might sell its core business and spin off the Alibaba investment. Yahoo had also added that it was in the process of shutting down more businesses this quarter. Autos, games, real estate and Smart TV were being shut down. Yahoo also expected to close its offices in Burbank, Buenos Aires, Dubai, Madrid, Mexico City and Milan by the third quarter. The company’s headcount is less than 9,000 employees and 700 contractors.
Quarterly Results: Earlier this month, Yahoo reported revenues of $1.3 billion for the quarter ended June 30 (Q2 2016) up 5.22% from $1.24 billion in the same quarter last year. Losses, however increased to $440 million compared to $22 million in the same quarter last year. The losses were attributed to $466 million goodwill impairment from its acquisition of Tumblr (it had paid $1 billion for the company) and loss from operations ($490 million).
Other divisions shut down: In March 2015, Yahoo shut down its office in Beijing, China, resulting in up to 300 job cuts. In February 2015, Yahoo India laid off over half of its editorial team based in Bangalore and about 35% of its editorial staff in Canada, which together represented about 100-200 jobs, citing global reorganization and restructuring. In October last year, Yahoo’s Software Development Centre in Bangalore saw around 600 layoffs as a part of its team consolidation worldwide.
In June 2015, the company shuttered Yahoo Maps and Yahoo Pipes , GeoPlanet, PlaceSpotter APIs and some regional verticals. In January this year, the company shuttered Yahoo Screen, its YouTube-like video hub.
Verizon’s AOL acquisition: In May last year Verizon acquired AOL (American Online) in a $4.4 billion all cash deal. The deal included all of AOL’s properties: Its content properties like Huffington Post, Moviefone, Engadget, TechCrunch and Stylelist, advertising properties like AOL advertising, advertising.com, 5min Media and StudioNow, local services like MapQuest and its membership services like dial up internet access, AOL Mail, AIM and About.me.
Image Source: Flickr user Scott Schiller