Verizon closes $4.5B acquisition of Yahoo, Marissa Mayer resigns [Memo]

It’s now official. After #Yahoo shareholder approval last week, #Verizon today announced that it has finally closed its acquisition of Yahoo, which it plans to combine with its #AOL assets into a subsidiary called #Oath, covering some 50 media brands (including TechCrunch) and 1 billion people globally. It will be led by Tim Armstrong, who was the CEO of AOL before this. As expected, Marissa Mayer, who had been the CEO of Yahoo and recently received a $23 million ‘golden parachute’ for her work there, has resigned. “Given the inherent changes to Marissa Mayer’s role with Yahoo resulting from the closing of the transaction, Mayer has chosen to resign from Yahoo. Verizon wishes Mayer well in her future endeavors,” Verizon said in a statement. You can find Marissa in her own words here on Tumblr. TLDR: It’s a long list of the achievements made with her at the helm these last five years, and — alas — you will only read of the struggles that Yahoo went through between the lines. The deal, nevertheless, brings to a close the independent life of one of the oldest and most iconic internet brands, arguably the one that led and set the pace for search — the cornerstone of doing business on the spaghetti-like internet — at least until Google came along and surpassed Yahoo many times over, and led the company into a number of disastrous and costly attempts to redefine itself, ultimately culminating in the sale we have here today. The sale of Yahoo is another sign of the massive consolidation that continues to happen in the world of online media and content, as large companies look to bring together multiple audiences for economies of scale to build out stronger advertising businesses in competition with the likes of Google and Facebook. “The close of this transaction represents a critical step in growing the global scale needed for our digital media company,” said Marni Walden, Verizon president of Media and Telematics (which will include Oath), in a statement. “The combined set of assets across Verizon and Oath, from VR to AI, 5G to IoT, from content partnerships to originals, will create exciting new ways to captivate audiences across the globe.” Carriers have been an especially interesting player in this regard, as they are looking to offset declines in their legacy businesses. But don’t cry for Verizon just yet: the company employs 161,000 people and made $126 billion in revenues in 2016, with 113.9 million retail connections in its mobile business. As we wrote last week, there will be cuts of around 15 percent of all staff associated with the acquisition of Yahoo and merger with AOL, around areas like operations and sales and marketing. Today, no word about that in the official announcement although we are asking about this. Also not specified is who else is departing along with Mayer. As we reported last week, Adam Cahan, who had been an SVP at Yahoo very close to Mayer, was also on his way out, as was Bob Lord, the CISO who was at the head of Yahoo’s security operations when its massive breaches were revealed (although he was not there not at the time that they were taking place). That breach resulted in Verizon knocking off several hundred million dollars from its original offer price for the company. A spokesperson for AOL/Oath declined to comment on specific departures, and provided the following statement about the other redundancies, in line with previous statements: “Oath’s strategy is to lead the global brand space. With access to over 1B consumers upon close, we will be positioned to drive one of the most important platforms in the consumer brand space. Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy.” In the meantime, unsurprisingly, David Filo, Eddy Hartenstein, Richard Hill, Marissa Mayer, Jane Shaw, Jeffrey Smith and Maynard Webb Jr. have already resigned from Yahoo’s board. “We’re building the future of brands using powerful technology, trusted content and differentiated data. We have dominating consumer brands in news, sports, finance, tech, and entertainment and lifestyle coupled with our market leading advertising technology platforms,” Armstrong said in a statement. “Now that the deal is closed, we are excited to set our focus on being the best company for consumer media, and the best partner to our advertising, content and publisher partners.” This will include not just media brands but ad tech underpinnning how to leverage these audiences. In this case, the focus in on ONE by AOL and its BrightRoll technology covering mobile, video, search, native and programmatic ads.

https://techcrunch.com/2017/06/13/verizon-closes-4-5b-acquisition-of-yahoo-marissa-mayer-resigns-memo/

Confirmed: Verizon will cut ~15% of AOL-Yahoo staff after merger closes

The proportion of jobs being made redundant across #AOL and #Yahoo is around 15 percent globally, we have confirmed with our sources. This shakes out to as many as 2,100 jobs being lost as part of the corporate merger. Yesterday Re/Code suggested up to 1,000 jobs will be cut across the combined company, as duplicate roles in departments such as finance, HR, marketing and admin are taken out, but our sources said that figure is too low. We understand there are around 14,000 employees in total across AOL and Yahoo today. While no voluntary redundancies are being offered, one source told us that employees who left in recent months are being paid out to help hit reduction targets. We are also told that the proportion of redundancies is not equal across internal departments. One source said this can be up to 30 percent, depending on the organization, noting another has cuts of ~5 percent. “It seems that a lot of thought and effort has gone into this, and counterpoints have been listened and accepted,” the source added. Last July Verizon, AOL’s parent company, announced it had finally sealed an agreement to acquire Yahoo (Disclosure: AOL is also TechCrunch’s parent company). The deal is now racing to a close. We understand the proxy vote is taking place today — meaning the acquisition will close in a week’s time. The combined AOL-Yahoo entity has already been given a new brand name (Oath:), and will be headed up by AOL CEO Tim Armstrong. Asked for comment for this story, an AOL spokesperson told us: “Oath’s strategy is to lead the global brand space. With access to over 1 billion consumers upon close, we will be positioned to drive one of the most important platforms in the consumer brand space. Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy.” Back in February, Yahoo and Verizon agreed that $350 million would be knocked off the sale price for Yahoo — cutting it down to $4.48 billion — following the disclosure of two massive data breaches, one estimated to cover around 500 million accounts, and another affecting more than 1 billion accounts. It’s not yet clear who will head up security for Oath.

https://techcrunch.com/2017/06/08/confirmed-verizon-will-cut-15-of-aol-yahoo-staff-after-merger-closes/

Verizon acquires SocialRadar to buff up MapQuest’s location data

We got word earlier today that Verizon had acquired #SocialRadar, a mapping startup founded by Blackboard co-founder Michael Chasen that promises to provide its users with far more accurate location data for businesses — down to where exactly a door is. Reached by phone, Chasen confirmed the acquisition. #Verizon, the corporate parent of TechCrunch and #AOL, will use SocialRadar’s technology in #MapQuest. While you may not spend a lot of time thinking about MapQuest these days (or print out its directions to take on road trips), it’s still one of the biggest online and mobile mapping services on the market. Beside its consumer tools, it has a thriving B2B business and a very large number of developers who use its data in their apps. As Chasen, who sadly declined to divulge the purchase price, told me, the company talked to a number of potential acquirers after it launched its mapping SDK earlier this year. One of those companies was Verizon/MapQuest, but early on, the conversations mostly focused around licensing.  Washington, DC-based SocialRadar will keep its existing offices, but the team is already working closely together with the MapQuest team in Denver and other AOL offices to integrate its data and services with MapQuest’s existing tools. Chasen told me he is especially excited about getting his service into the hands of millions of consumers and developers. He also noted that MapQuest’s reach into the developer community will mean that many mobile apps will soon be able to offer far more accurate and responsive location-based features. “We always wanted our tech to be used by as many people as possible,” Chasen said. SocialRadar previously raised $12.5 million in a Series A round led by New Enterprise Associates and Growth Tech Ventures. At the time it raised this money, though, SocialRadar was still focused on building a location-based app. As the team built that service, though, it realized how bad the existing location data was. Using street-level imagery, some human interaction and proprietary algorithms, SocialRadar can pinpoint exactly where a business is located (so your Uber driver doesn’t try to drop you off in the alleyway behind TechCrunch’s offices, for example). At the time of the acquisition, SocialRadar had six employees. They are all moving to Verizon now.

https://techcrunch.com/2016/11/16/verizon-acquires-socialradar-to-buff-up-mapquests-location-data/

Time Warner ruined AOL, says ex-AOL exec Ted Leonsis

#AT&T is planning to buy #TimeWarner for $85 billion, which has given several folks in the media world a heavy dose of déjà vu. Back in 2000, a $164 billion deal created #AOL Time Warner, unifying distribution and content along very similar lines to those now being preached by AT&T’s leadership. The results were disastrous. And one of the guys who was there — longtime AOL executive Ted Leonsis — said in hindsight that buying Time Warner wrecked the company’s momentum. “There was friction in the system, even though the base idea [was right:] Convergence, that everything on paper, everything on plastic would become Xs and Os and would be delivered on a platform if you had everyone’s credit card,” Leonsis recalled on the latest episode of Recode Decode, hosted by Kara Swisher. “And you could stream things, because AOL was a private internet. We were the original cloud-based service. But it was just such a big merger and it became so distracting.” For example, after buying instant messaging company ICQ, AOL had been planning to build telephony features into a future messaging product. However, Time Warner put the kibosh on that. “The cable company had its triple play going, so, ‘Oh, you can’t do that,’” he said. “All of a sudden, we went from being young, nimble, playing offense, to really being a defender. And I didn’t like that.” Leonsis was interviewed in September, before the AT&T-Time Warner deal was announced. Now a majority owner of several sports teams and investor in tech companies around the country on behalf of Revolution Growth, he acknowledged that one of AOL’s big mistakes was deciding to become a next-generation media company instead of buying up other nascent internet startups like Amazon, Yahoo or Google.

http://www.recode.net/2016/10/26/13413444/ted-leonsis-aol-time-warner-acquisition-recode-decode-podcast

AOL is losing its top global-sales exec ahead of the Yahoo deal

#AOL is losing its top global-sales exec in the middle of its deal to merge its operations with #Yahoo. #Verizon agreed to buy Yahoo for $4.68 billion earlier this year. Since then, their executives, including AOL’s Tim Armstrong, have been working on coordinating the inevitable integration. Jim Norton’s departure comes as AOL and Verizon are trying to figure out the best organization to create after it completes its deal with Yahoo, which is expected to happen later this year or early next year. Sources say that there are plans to split AOL into two units, one that will focus on media and advertising and the other on platforms and tech. Presumably, the strategy is to fit Yahoo’s unit into that structure. There is a possible glitch due to recent revelations about a data breach at Yahoo; because of the breach, Verizon and Yahoo are discussing potential liabilities that may impact terms of the deal. But executives at AOL and Verizon are proceeding as if it will be happening at this time. Norton’s exit is yet another wrench in what has become a complex deal. He is a key player at AOL as the company’s global head of media sales. He came there in 2011 from Google, where Tim Armstrong, now CEO of AOL, was its top sales exec. He is leaving for Condé Nast, but it’s not clear what his role there will be. Presumably, it’ll be a top sales position.
http://www.recode.net/2016/10/10/13227166/aol-yahoo-jim-norton-conde-nast

Yahoo and the Online Universe According to Verizon

#Verizon Communications’ $4.83 billion acquisition of #Yahoo has the technology cognoscenti scratching their heads. What does Verizon, the country’s biggest wireless company, see in an internet also-ran? Fortune criticized “The Problem With Verizon-Yahoo.” #T-Mobile’s chief executive, John Legere, derided the deal as a “slippery slope.” The chief executive of #Sprint, Marcelo Claure, said that when telecommunications companies try to get into the content business, “history has proven that every single one of them has failed.” And there are reasons to think history might repeat itself. Yahoo will be merged with #AOL, another faded star of Web 1.0 that Verizon bought last year. These brands from yesterday are supposed to compete for the same advertising dollars that titans like #Google and #Facebook are devouring faster than ever.

http://mobile.nytimes.com/2016/07/31/business/media/yahoo-and-the-online-universe-according-to-verizon.html?_r=0&referer=https://www.google.com/

Yahoo’s board reportedly agrees to $4.8 billion Verizon bid

According to reports that are starting to trickle in, #Yahoo ’s board has accepted the terms of the #Verizon offer we reported last week. The core assets of the company that started life in Jerry Yang and David Filo’s 1994 Stanford dorm room as “Jerry and David’s Guide to the World Wide Web” — and at one point was one of the highest valued properties on the internet — will now join another former high-flyer of the internet’s earliest days, #Aol (full disclosure: the owner of #TechCrunch), in the Verizon stable. It’s hard to overstate how dominant a player Yahoo once was. The company, which now holds most of its value in its #Alibaba investment, was once a $125 billion behemoth that dominated internet search and commanded one of the highest valuations of any online business — it was #Google before Google was Google. Like Aol, Yahoo was never able to fully recover from the dot-com crash. The advent of Google (and then #Facebook) pushed both early Internet portals further toward irrelevance as one Google’s search algorithm prevailed and Facebook a new method for browsing online — replacing monolithic portals with personalized feeds tailored to the tastes of social networking peers. And in the age of mobile browsing and apps, the company’s relevance eroded even further. Yahoo grew up with the early Internet and for a time it was the site for nearly everything. From an online directory, the site ballooned to include email providers (#Four11 ), web hosting services ( #Geocities ), and video and radio simulcasting through the $5.7 billion acquisition of Mark Cuban’s Broadcast.com.

https://techcrunch.com/2016/07/24/yahoo-bid/

Verizon is close to buying Yahoo for $5 billion as a ‘safe bet’

#Verizon is closing in on a deal to buy #Yahoo ’s core business for about $5 billion, according to sources familiar with the talks. The telco giant has long been considered the favorite to buy Yahoo’s internet assets, which it wants to combine with #AOL , which it bought last year for $4.4 billion. Part of Verizon’s pitch to Yahoo’s board is that it is the logical choice, since it is already operating a similar business. The concept of such a deal is to combine its advertising tech assets and become the third alternative to leaders #Facebook and #Google. Both companies also have extensive media assets. "If Verizon bid that high, they definitely got it, because they’re the safe bet for Yahoo," said a rival bidder.
http://www.recode.net/2016/7/22/12256772/verizon-yahoo--5-billion-aol

The latest Yahoo offers are due tomorrow, with the final round expected in two weeks

@Yahoo suitors will offer up their third round of bids tomorrow, according to sources close to the situation, yet another sluggish step in the endless process that has become the sale of the former Silicon Valley powerhouse. Remaining bidders — including #Verizon and a group headed by Quicken Loans’ Dan Gilbert — have been told that the final selection process will take place around July 18. #AT&T

http://www.recode.net/2016/7/5/12096084/latest-yahoo-bids-due-tomorrow-final-selection-july-18