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Remember Yahoo and AOL? They’re merging in $4.83bn Verizon deal

US telecoms giant Verizon is buying out ailing digital advertising company Yahoo for $4.8 billion in cash and rolling it into AOL, bought last year for $4.4 billion.

“Despite recent uncertainty… our loyal employee base has stepped up,” the team said on a call with shareholders today. That’s uncertainty that has lasted a rather long time and cost many thousands of jobs.

The pair both offer ad products across search, banners, native and mobile, which could present an interesting alternative (to Google) for brands wanting to do digital advertising at scale.

“Together it puts us into a position with advertisers [to be] the illustrious must-buy,” Yahoo CEO Marissa Mayer said on the call.

AOL has a great cast of digital media brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and, as well as programmatic advertising technology that will likely be merged with Yahoo’s products.

Mayer also said she’s hoping Verizon will offer a larger distribution channel for her company’s range of apps. They include Mail, Weather and Sports, and Yahoo claims they currently have 1 billion monthly active users.

But many commentators reckon this is all too little, too late for both of these dot-com media giants.

The Verizon sale only incorporates Yahoo’s “core business”. Shares Yahoo holds in Chinese ecommerce platform Alibaba are being rolled out into a new publicly listed investment company called RemainCo.

The Yahoo board said it has no intention to sell those at present, although they acknowledged that Alibaba might wish to buy these back (somehow, “it’s complicated”) in the future.

Yahoo Japan shares, part of a joint venture with Japanese SoftBank, are not included in the price and Yahoo is allowed to sell them on the open market after giving its partner first refusal.

Yahoo also owns more than 4,000 “non-core” patents and many of those have already been spun out into a separate company, Excalibur, rather than being part of the Verizon transaction.

Some of these are already licensed to various companies and the board said it had “tremendous interest” from a number of global tech firms in extending these opportunities.

Yahoo currently holds $7.7 billion in cash and marketable securities, which it intends to ensure lands in the hands of its shareholders.

Although the company has struggled in recent years, the board said there would be no performance conditions attached to the sale. Asked whether this was the highest bid received for the company, the board said this deal was the “best for shareholders”.

Before the deal is fully set in motion, it will need a shareholder vote, FDC approval and anti-trust negotiations “in some regions”. The deal is set to close in Q1 2017, a significantly longer time span than the incorporation of AOL.

Asked whether she would be staying on at the company post-Q1, Mayer’s answers were suitably vague.

“We have dedicated ourselves to the process and getting to this point,” she said. “I plan to stay, I love Yahoo and plan to see it into its next chapter. We’re committed to seeing the transaction through to closing.”

Mayer certainly won’t keep the top job within the new entity, which will fall under Marni Walden, EVP and president of product innovation and new businesses at Verizon.

This is a bit of a blow to diversity at the top of tech companies, but Walden is a noted “rising [female] star” too, having spent her entire career in the wireless industry.

This won’t be the last you hear from her. She’s probably due some recognition at 49!