Yahoo to sell its email service, news, sports in addition to its advertising tools
July 25, 2016: Yahoo’s board has agreed to sell the company’s core internet operations and land holdings to Verizon Communications for $4.8 billion. After the sale, Yahoo shareholders will be left with about $41 billion in investments in the Chinese e-commerce company Alibaba, as well as Yahoo Japan and a small portfolio of patents.
Earlier there was speculation of Verizon being the frontrunner for the beleaguered internet company. Yahoo is expected to sell its email service and news, finance and sports websites in addition to its advertising tools. The company has been under pressure from shareholders who are seeing a downturn of the company’s revenue during the past eight years.
Yahoo’s results for April-June quarter, which were announced on July 18 showed that the company’s revenue fell 19 per cent from 2015, while its loss widened to $440 million.
CEO Marissa Mayer, who was hired four years ago, had earlier told investors the company is carefully evaluating bids for sale.
Mayer is not expected to join Verizon but will get a $55 million severance package if she loses her job after the sale. This was revealed in a regulatory by Yahoo in May this year, which gives details of cash, stock awards and other benefits that Mayer would get should she be forced out as CEO within a year after a sale.
Mayer received a compensation package valued at nearly $36 million last year under the SEC’s accounting rules. Yahoo’s board maintained in its filing that it was only worth about $14 million as of April 1.