Verizon To Acquire Yahoo Core Assets For $4.8 Billion

Verizon Communications will announce Monday its intent to acquire Yahoo's core assets, including its search, video and mobile advertising businesses in a deal valued at about $4.8 billion, according to reports.

Bloombergand The Wall Street Journal report that Yahoo has signed the deal and will announce it before the stock market opens Monday. Each media outlet cited a person familiar with the matter. The price tag also includes some real estate.

The move will likely bring an end to the relationship between Yahoo and CEO Marissa Mayer.

Speculation began building Friday that the two companies would make an announcement early this week. The assets -- which also contain Gemini, Yahoo's programmatic native advertising business -- will roll into AOL's advertising group, run by CEO Tim Armstrong to help it compete with Google and Facebook.



While the acquisition gives AOL an edge, advertising deals could become a little sticky and a lot more complicated.

Earlier this year AOL inked an advertising deal with Microsoft Bing. The 10-year deal that went into effect Jan 1, 2016 made Bing the provider of paid-search ads across the AOL network and the power behind AOL search. At the same time the companies announced AOL would take over Microsoft's display ad business.  

AOL sells the ads served on MSN, Outlook, Xbox, Skype in some major markets like the United States, the United Kingdom, Canada, Brazil, France and many others.

Yahoo's search deal with Google, inked in 2015, could complicate the deal just a bit more. At the time, Yahoo's partnership to serve Google's results and search ads in some of its search results was intended to complement the search services provided by Microsoft.

Despite Yahoo's focus on Gemini, its search platform, the company's share of mobile organic search visits continues to fall by about a point in the past year -- even as Google drives a much greater portion of its mobile traffic to ads on Yahoo's sites. Yahoo Gemini was launched as a mobile-only platform, but later took on desktop traffic, per Merkle, but it only produces 41% of clicks from mobile, compared with 57% for Google.

Merkle estimates that in the second quarter, Bing earned about 74% of click share from search ads on desktops, followed by Yahoo Gemini at 59% and Google at 43%. On smartphones, the figures were 11%, 23%, and 43, respectively. The agency reported Bing took 15% in click share on tablets, Yahoo Gemini took 19%, and Google took 14%.

Yahoo still needs to determine what it will do with nearly 3,000 patents and its stakes in Yahoo Japan Corp., majority-owned by SoftBank Group Corp. and Chinese ecommerce company Alibaba Group Holding Ltd.

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