Verizon to buy Yahoo for $4.8 billion

Verizon sealed a deal to buy Yahoo’s Internet business for $4.83 billion dollars, the company announced today. The deal includes Yahoo’s search, finance, sports, video, and email services, as well as the Tumblr social network – all of which the telecommunications company will add to its business portfolio.

The purchase is a sign of Verizon’s aim to be a player in the wireless entertainment business and advertising markets, as this deal and last year’s purchase AOL for $4.4 billion indicate. Verizon has telecom infrastructure – although it’s been selling it off in large chunks – but it believes it needs content if it wants to compete with Silicon Valley giants like Google and Facebook.

“The purchase does carry risks for Verizon, which is well known for its wireless phone and internet services, but has little experience in the cutthroat business of digital content,” the New York Times reports. “Analysts say that its AOL purchase has yet to prove its worth, although Tim Armstrong, AOL’s chief executive, is well regarded in the industry.”

As the race to develop the next generation wireless network begins and video entertainment moves to streaming services, Verizon would do well to remember that search engines and video services depend on a modern, robust wired and wireless infrastructure to connect customers to content.

Links:

Verizon Announces $4.8 Billion Deal for Yahoo’s Internet Business (New York Times, July 25, 2016)

Verizon acquires AOL (Speed Matters, June 28, 2015)