US internet firm Yahoo is being acquired by American telecoms giant Verizon Communications for nearly $5bn (£3.8bn) in cash. Yahoo will be combined with AOL, another faded internet star, which Verizon bought last year.
The deal does not include Yahoo’s valuable stake in Chinese firm Alibaba. The price tag for the deal is well below the $44bn Microsoft offered for Yahoo in 2008 or the $125bn it was worth during the dot.com boom. Verizon said the deal for Yahoo‘s core internet business, which has more than a billion active users a month, would make it a global mobile media company.
Meanwhile, content consumption patterns changed too. Instead of hour-long sessions sifting through expansive content and news sites on a desktop computer, we sought tiny snippets of mobile entertainment to fill the moments of downtime during our lives on the go.
Yahoo wasn’t built for either. It was hesitant to adapt. A few products like Yahoo Sports and Yahoo Finance were snackable enough. But the core properties had evolved to survive in a different environment. They got mobile versions mostly in design, not in function. Not only did usage slip away, reducing Yahoo’s ad inventory, but it missed out on the ad targeting data generated by social networks. And so Yahoo’s value sank like a stone.
- 1994 Yahoo – which stands for Yet Another Hierarchically Organized Oracle – is founded
- 2000 Yahoo valued at $125bn at height of dot.com boom
- 2002 Google rejects a $3bn bid from Yahoo
- 2008 Microsoft’s $44.6bn offer for Yahoo is turned down
- 2013 Blogging site Tumblr acquired by Yahoo for $1.1bn
- 2015 Yahoo makes net loss of $4.4bn
- 2016 Verizon agrees $4.8bn deal to buy Yahoo