Verizon announced on Monday that it has set it sights on Yahoo!, one of the original Silicon Valley Internet pioneers (they invented the banner ad), for a purchase price of $4.83 billion.
After months of speculation, the two parties reached a deal that entails Yahoo! selling its core businesses to Verizon, allowing one of the nation's largest wireless telecommunication companies to begin competing in the digital advertising space with giants Google and Facebook. The sale does not include Yahoo! selling its cash and equity investments in Alibaba, Yahoo! Japan and other investments. After the sale, Yahoo! shareholders will be left with about $41 billion according to New York Times.
Yahoo! CEO Marissa Mayer is expected to step down and receive a severance package worth $55 million(!). Mayer was plucked from Google in 2012 after being passed over for a promotion. In 2013, Yahoo! acquired social network site Tumblr in hopes of attracting younger users.
The proposed deal involves integrating many of Yahoo!'s consumer services such as email, news, Tumblr, and other services into Verizon's AOL unit, acquired in May 2015 for $4.4 billion. Mayer states in a letter to Yahoo! employees that the sale is "a great opportunity for Yahoo! to build further distribution and accelerate our work in mobile, video, native advertising, and social."