Telecommunications giant Verizon has announced the acquisition of search engine tech company Yahoo for $4.83 billion. Plans include the Yahoo acquisition integrating with Verizon’s fairly recent purchase of AOL.
As quoted by Verizon’s CEO, “Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators, and advertisers. The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”
Verizon’s game plan with the two companies consists of a few elements:
- Diversify their offerings into new industries like advertising and media
- Grow their revenue and operations
- Put themselves in the position to compete with Google and Facebook in the advertising realm
However, with any acquisition, there are plenty of challenges to come. With the combined total of 15,600 employees and 700 contractors between Yahoo and AOL, bringing all of them together presents the first issue. The second concern is the lack of money Yahoo has made over the last few years, potentially making Verizon have to work twice as hard to ensure they benefit from the deal.
When looking at the purchase, Yahoo’s diversity won them over. As a well-known brand in search & entertainment to an owner of companies in finance, news, and sports industries, they’ve earned a significant following of over 225 million users. Also, with Yahoo’s ownership of Brightroll, Flurry, Gemini, and even Tumblr, they’ve got the credentials to show they’re making an impact in the advertising world.
Verizon did have quite a bit of competition for the Yahoo purchase. After Yahoo announced their interest in acquisition offers, companies like AT&T, TPG equity group, and Dan Gilbert of Quicken Loans’ investor group jumped on the opportunity. Despite their competitors’ best efforts, Verizon was the frontrunner from the beginning.
So, what does the Verizon, AOL, and Yahoo merger mean for the tech world? The opportunities are endless. Verizon could:
- Use AOL’s online communication knowledge to make a new, interactive messaging system
- Use Yahoo’s search engine and advertising knowledge to build an even stronger search engine with advertising opportunities within it
- Create a social network/online system within the other industries Yahoo has bought into, including finance, news, and sports
What big things do you expect to come from this acquisition? Let us know below.