Yahoo agreed to sell its core assets to telecom giant Verizon for $4.8 billion, ending a 20-year run by the internet pioneer as an independent company, the firms announced Monday.
Verizon chief executive Lowell McAdam said Yahoo would be integrated into its recently acquired AOL unit to create “a top global mobile media company, and help accelerate our revenue stream in digital advertising.”
The deal marks a dramatic fall for Yahoo, one of the best known names of the early internet era, which had a valuation over $100 billion before the dot-com collapse in 2000 and which in 2008 spurned a $44 billion bid from Microsoft.
Yahoo has been in restructuring mode for nearly four years under chief executive Marissa Mayer, who came from Google in an effort to help the internet pioneer regain its past glory.
The deal would allow Yahoo to separate its main assets from its holdings in Chinese internet giant Alibaba, which accounts for most of Yahoo’s $37 billion market value.
The exact terms of any acquisition were not clear. Yahoo declined to comment on the process “until we have a definitive agreement,” a company statement said.
But any deal would almost certainly include the popular Yahoo News, Mail and other online services used by more than a billion people worldwide.
Yahoo remains a major force online, but has lagged its rivals in its ability to “monetize” its audience through advertising that is linked to customers’ browsing and other online activities.
Several other bidders have been in talks, according to reports, including Quicken Loans founder Dan Gilbert, who is being backed by billionaire Warren Buffett.
But Verizon appeared to be the leading candidate, because of its ability to integrate AOL’s advertising technology into Yahoo services.
“We continue to believe Verizon is the most sensible buyer, to combine with AOL, cut costs and leverage proprietary first-party data,” said Daniel Salmon at BMO Capital Markets in a research note.