Yahoo has been sold. But what does this mean? (2024)

Yahoo has been sold. But what does this mean? (1)

The purple party is over.Credit: Getty Images

Goodbye, Yahoo.

After months of speculation, the early internet powerhouse has sold off its core assets for $4.83 billion to telecom giant Verizon.

It has been a long road to this point with multiple CEOs, multiple acquisitions and multiple second chances, but on July 25 it was clear: Yahoo, as we know it, will never be the same. Let's take a moment to work out what exactly that means.


How Yahoo derailed Tumblr

The company was founded 22 years ago, way before the internet merged into the beast it is today. Yahoo began as an internet directory, a search engine and then a web portal. In a time before Google and sophisticated search, Yahoo was the homepage of the internet for the majority of people.

"Yahoo is a company that changed the world. Before Yahoo, the Internet was a government research project. Yahoo humanized and popularized the web, email, search, real-time media, and more," CEO Marissa Mayer wrote in an email to staffers on Monday. Note the past tense.

You see, Yahoo's peaked abruptly with the bursting of the tech bubble in 2000 and it never made its way back into the spotlight. The company had a long list of products -- including news, finance and sports content, email, mobile services, social platforms -- but in the end it failed to define what it was and became more fractured as time went on. On Monday, Verizon joined the dwindling party.

Yahoo has been sold. But what does this mean? (2)

Marissa Mayer in 2007.Credit: Getty Images

Why did Verizon buy Yahoo?

U.S. telecommunications company Verizon purchased AOL for $4.4 billion in May 2015, so it makes sense the company wanted to find another digital asset to further enhance its mobile offering.

In the statement about the acquisition, Verizon noted Yahoo's 600 million monthly active mobile users plus a total audience of 1 billion monthly active users. Perhaps the mammoth audience will finally find a less confusing, yet mobile home.

The other main thing Yahoo has going for it is its advertising technology.

"Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers," Verizon CEO Lowell McAdam said in a press release. "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."

What did the sale include?

There's a lot of talk around about "operating business" and "core" and "key" assets, but what does this lingo actually mean?

It's key assets include Yahoo mail, editorial brands including finance, news and sports along with advertising products including Brightroll, Flurry and Gemini. All these and more will be picked up by Verizon.

Pretty much all the products you would have come into contact with -- think email, Flickr, news, Tumblr -- plus advertising stuff. They'll also score themselves some sweet editorial talent, such as former ABC News anchor Katie Couric and New York Times columnist David Pogue (although there's plenty of conjecture that the big names could be looking to move on).

One thing to note is that there is no mention of Mayer's biggest acquisition, Tumblr, in the statement from either party. They've either have forgotten they own the tween social media giant (bought for $1.1 billion in 2013) or they simply don't want to talk about it. Either could be true, but we are betting on the last option as the company had to write down Tumblr's value significantly in recent times. The company confirmed to Mashable it is being sold off.

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Also part of the deal are Yahoo's sizable real estate holdings, which reportedly include more than one million square footage of buildings that could be worth around $1 billion.

What the fire sale doesn't include, according to Verizon's statement, is Yahoo's very healthy shares in Alibaba and Yahoo Japan. The company's patent portfolio, Excalibur portfolio -- which has been rumored to be worth $1 billion -- will also remain with the company for the time being. These products will sit under a company with a new name, which will function as a publicly traded investment company.

Yahoo has been sold. But what does this mean? (3)

Remember checking your Yahoo email on your Blackberry? Times are changing.Credit: Getty Images

But wait, will I lose my email account?

We are here to answer your burning questions, old timer and Yahoo email account holder. TBH it is probably time to update your email account, but if you are still feeling the purple vibes, you will be happy to know it is not going anywhere... yet.

"Verizon is acquiring all of Yahoo's global operating business and we will discuss integration plans over time," a Yahoo spokesperson said in an email to Mashable. "Until closing, Yahoo will operate its business independently and will continue to pursue the strategic plan we first announced in Q1 2016. For now, today's news will not impact Yahoo products. Verizon and Yahoo are committed to delivering great experiences for all their users around the world."

In other words, you've got at least until 2017, when the deal is Verizon closed.

Beyond that, the chances that Verizon would buy Yahoo only to shut down one of the web's biggest email services doesn't make much sense. Verizon hasn't shut down AOL email, so there's little reason to think the company would do so with Yahoo.

Why did Yahoo need to be sold?

That's a long story that needs a big glass of red wine and a fire place. You can read an earlier analysis on it here.

To put it simply: Yahoo never worked out exactly what it was and what it stood for. The part-technology company, part-media company, according to many analysis pieces on the downfall of Yahoo, got caught somewhere in the middle.

Mayer was brought across four years ago from Google to try and revitalize the fledgling brand. By some accounts, she took on a monster of a task that was always going to be impossible to achieve. The website had an enormous amount of visitors coming to it every day, but it just wasn't bringing in the dollars. Google and Facebook long overtook Yahoo, in search and social media respectively, and it gradually slid into the land of dinosaurs.

Tumblr -- the golden investment -- also lost its way after Yahoo's acquisition. It struggled to keep pace with Snapchat and Medium and again, despite a huge user base, couldn't generate the cash needed to make it a raging success. The only thing making money for Yahoo seemed to be its stake in Chinese marketplace, Alibaba, but even that was causing problems.

In the end, nothing Mayer did could save the internet's first born.

Yahoo has been sold. But what does this mean? (4)

It's been fun.Credit: Getty Images

So is this the end of Yahoo?

Not exactly.

You're still going to be able read your Yahoo mail, get your weather on the Yahoo app, play Yahoo fantasy football and just about everything else you normally do with Yahoo.

Behind the scenes, however, there could be major changes.

Thousands of staff members may be cut from the 10,000 people Yahoo employs across the world. Even Yahoo Finance published its own post on why employees for both Yahoo and Verizon "must feel a little nervous."

And in a broader sense, it is the end of Yahoo. The company that was once among the most valuable internet properties -- much like AOL -- has now been bought primarily because a lot of people use its email service and it has some decent advertising technology. Yahoo will remain as a company, but it is officially over as a forward-looking tech giant.

Or maybe not, according to Mayer.

"Yahoo is a company that changed the world. Now, we will continue to, with even greater scale, in combination with Verizon and AOL," she wrote.

The author of this story worked at Yahoo from 2008 to 2011.


Yahoo has been sold. But what does this mean? (5)

Jenni Ryall

Jenni Ryall is Mashable's VP of Content Strategy. She spends her time launching cool, new things such as Mashable Deals and Mashable Reels. On the other days, she is developing strong partnerships with companies including Apple News, Flipboard, Snapchat, Facebook, Twitter and Reddit.

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Yahoo has been sold. But what does this mean? (2024)
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