Reasons to why a Telecom Giant Verizon bought a Tech Giant Yahoo

The news is viral that the Tech giant Yahoo’s core business is purchased by the America’s Telecom Giant Verizon. The amount to be paid in all cash is $4.83 Billion, and the HQ will be handover in the first quarter of 2017. The core business includes the Advertising tools such as Brightroll, Flurry, Gemini and Tumblr, Content, Search and Mobile Activities. The Yahoo’s 15% share in Alibaba i.e. worth $32.8 Billion and Japan Yahoo i.e. worth $8.2 Billion is not included in the deal. So it all depends on what Yahoo does with these $40 billion left with them. But the question is what the strategy of Verizon is after this purchase? Is it an investment for money generation? If that was the question then to remind you that Yahoo incurred a loss of 550 million in their market capital. So the question still remains, the answer is in the following paragraph.

If we track the previous acquisitions of Verizon, last year they bought AOL that is also a Technology investment and was bought for around $4.4 billion. The AOL is having some possessions like the Techcrunch.com and other advertising units, so with two tech giants under one brand which is dealing in Telecoms, it is clear that the Verizon is planning to diversify its revenue and income. The Verizon is directly putting up the competition with the two Silicon Valley giants named Google and Facebook which has a net worth of $506 Billion (Of the Parent Company of Google Alphabet) and $348 Billion respectively. So they want to be the third way and see a great deal of opportunity in the Advertising Area. With huge masses of people working for Yahoo whose latest head count was around 8800 and that of AOL is of 6800, the Verizon is trying to magnify its opportunity of becoming one Giant with the Merger of these two companies. If the facts are to be believed the Verizon was much interested in the customer base of the Yahoo which is 1 Billion users and 500 million in mobile usage, the advertising opportunity is huge! So it is clear that Verizon s trying to be the third giant of the advertising industry and the interesting question is how they will do it. Because no doubt both AOL and Yahoo had potential and AOL is also making some good amount of profit but the merger might affect the bottom line of AOL as well as Yahoo is a loss-making firm. So let’s dig our eyes in the strategy of the Verizon and what further activities are in the pipeline after this Acquisition. If you don’t want to bother that and still want to read all the digital news just stick to the Nesterz BLogSpace and all the digital news right away. Also, don’t forget to go through some of the digital marketing services we provide to all the sorts of firms and parties. For digital excellence and expertise, don’t forget to request a quote from us.