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WSJ: Verizon offering $3 billion for Yahoo’s core business

Bid is considerably less than originally expected, others still in the hunt.

Greg Sterling on June 7, 2016 at 9:22 am

Yahoo is worth $35 billion, but Verizon is expected to bid about $3 billion for the company, according to The Wall Street Journal. Previously, analysts had anticipated bids of between $4 billion and $8 billion.

In 2008, Microsoft offered to buy Yahoo for roughly $45 billion.

Second round bids are being submitted this week. The other suitor mentioned as a serious bidder is private equity firm TPG. However, the report says that there will likely be one more round of bids — in an effort to generate more options for the Yahoo board.

At one time, a wide range of companies were mentioned as potential Yahoo buyers, including Time, Google, Comcast, AT&T and IAC. However, those brands are no longer in the running, according to media reports.

Verizon previously acquired AOL for more than $4 billion. Buying Yahoo would provide the company with some additional ad tech and a larger consumer audience. Yahoo is the third-largest property on the internet in the US, after Google and Facebook.

Reportedly, Verizon would acquire some but not all of Yahoo’s assets. The WSJ article says, for example, that the company isn’t interested in Yahoo’s physical real estate or patents. If Verizon were successful in buying most of Yahoo, it would then need to integrate the company with its AOL asset, which would be complex and probably result in considerable layoffs.

A sale of Yahoo’s core business is very likely at this point. Accordingly, current Yahoo CEO Marissa Mayer would probably leave, although she might oversee the company for a transitional period. If Mayer is removed as CEO, according to a previous report from CNBC, she would potentially collect nearly $55 million in severance payments and benefits.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.