Verizon Set to Take On Google and Facebook with Yahoo Acquisition

yahooVerizon has been setting itself up to be the next big player in digital advertising by buying up internet and advertising technology companies like AOL. In its latest move, Verizon is nearing a deal to acquire the iconic web pioneer, Yahoo! Inc. Although an agreement hasn’t been finalized, Verizon is said to be discussing a price close to $5 billion for Yahoo’s core internet business. Verizon says that Yahoo is a logical choice given that they are already operating AOL, and the two company’s media assets would compliment one another.

A Future for Yahoo

Yahoo has been in a months-long bidding process that began when CEO Marissa Mayer finally gave in to rising shareholder ire over the company’s future. After a failed plan to spin off Yahoo’s stake in Alibaba, the largest e-commerce provider in China, the company has been exploring alternative strategies, including selling off the core assets that once made the tech giant a gateway to the internet. Speaking of Mayer, the deal would spell an ironic twist given that AOL’s Tim Armstrong is a key player on Verizon’s side of the table. Mayer had previously rejected Armstrong’s efforts to merge AOL and Yahoo, but now the two will be coming together under Verizon’s banner.

Verizon and Yahoo

Although competitor AT&T and other buyout firms are active in the bidding process, Verizon is seen as the most complimentary and safe pick for Yahoo. Yahoo is an internet and social media powerhouse with millions of users and a number of key social media websites such as Flickr, Tumblr, and Yahoo Finance and Sports. But Yahoo’s ad tech, Flurry and BrightRoll, may be the underpinnings of the deal and, together with Verizon, suggest a world in which the digital ad market is no longer dominated by just Google and Facebook. The deal would expand Verizon’s advertising base by 200 million visitors and allow it to leverage an advertising engine that can collect more user data for targeted advertising.

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