Once valued at $125 billion, Yahoo was sold this past week to telecom giant Verizon for a fraction of that figure: $4.8 billion. Yahoo might not be the search titan it once was, but that doesn’t mean that this sale won’t have a big impact on the internet marketing world.
Reports indicate that Verizon is planning on shifting Yahoo core focus to targeted advertising. Verizon may already have a leg up in these efforts, having acquired another onetime internet power player in AOL last year for $4.4 billion. Because of existing ties to Microsoft, this could make Verizon a significant player when it comes to internet marketing.
Yahoo’s Internet Marketing Value to Verizon
Ever since Yahoo was put up for sale this spring, the storyline has held steady. In article after article, internet marketing experts wondered how an internet giant transformed itself into an internet mouse.
But that storyline — as convenient as it is — misses several key details. One of the bigger ones is that Yahoo is still the third-biggest American internet property behind Google and Facebook. While the drop-off from #2 to #3 is significant, that still gives Yahoo significant clout and power.
It also means that Verizon has just acquired a huge chunk of data on internet traffic. That is where internet marketing experts believe Verizon is getting value out of this deal. According to Barclays, Verizon is saving around $500 million a year on the sale, with the bulk of that value coming from the user data that Yahoo generates.
Now, Verizon plans to take that data, combine it with AOL user data, and harness both for the company’s internet marketing and advertising technologies. With the new data, Verizon plans to offer a more carefully targeted ad platform for online and mobile properties.
Verizon’s AOL unit is already a major player in the internet marketing sphere thanks to a deal with Microsoft for display, mobile, and video ads across US and international markets.
Mayer Headed Out, Walden In
Marissa Mayer, the embattled CEO of Yahoo, has announced that she will stay on through the close of the deal. After that, she is expected to be leaving the company entirely, though she has said that she remains open to a role within Verizon’s larger enterprise.
With Mayer out, Verizon’s head of product innovation and new business, Marni Walden, will be overseeing the transition.
Yahoo Inc. Retains Other Ventures
The news isn’t all bad for Yahoo investors. While the company’s internet properties have been sold to Verizon, Yahoo Inc. still retains its shares in Alibaba Group Holding Ltd. and Yahoo Japan Corp. Those combined shares are valued at an impressive $40 billion.
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