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Report: Verizon, Google Might Make a bid for Yahoo

April 7, 2016 - Written By Alexander Maxham

Yahoo has had a “for sale” sign up in their front yard since their Q4 2015 earnings when they formally announced that they were up for sale. Since then, we’ve numerous rumors and reports that the company might get bought by Verizon, as it would go nicely with their recent AOL transaction in 2015. Yahoo, who peaked in the 2000’s, have been trying to make a comeback with their web services and apps, but it appears to not be enough. And are putting themselves up for sale. According to a report out of Bloomberg this afternoon, Verizon Communications may be looking to make a first-round bid for the company’s web business next week. The report also mentioned that Verizon could acquire Yahoo Japan Corporation’s stake to help make the deal look a bit better for Yahoo and their shareholders.

Verizon isn’t the only one looking to pick up Yahoo in this round. Google, is also looking at making a bid. As it’s said that they might be bidding for Yahoo’s core business. Microsoft isn’t bidding on Yahoo again, after failing in 2008 to buy Yahoo. AT&T and Comcast have also decided not to bid for the company.

It appears that Verizon may be the main suitor here for buying Yahoo. This same report has stated that the company is working with three banks to prepare an offer for Yahoo’s web business. Typically when a company hires that many banks for an acquisition offer, it signals that they are serious about acquiring the company. Verizon has stated that they value Yahoo’s assets at less than $8 billion. Yahoo has stated that they would rather sell their 35.5% stake in Yahoo Japan, which is around $8.5 billion right now.

While there are other companies that are said to be interested in buying Yahoo’s assets, it would make the most sense for Verizon. Especially following their AOL acquisition last year. You see, Verizon is using AOL for their advertising as well as their video. With AOL owning a few different publications and being one of the bigger video sites, they were able to add in a good amount of “exclusive” video to their Go90 “over the top” or OTT service before it launched last year. And using AOL’s advertising expertise, they can offset the cost with ads. Yahoo also has an advertising arm in their company, but not as much video as AOL does. And where Verizon is planning to offer Go90 for free, and it’s whitelisted so it doesn’t use customers data, ads are going to be hugely important here.

With all of this said, it’s important to remember that none of this is official – other than Yahoo being up for sale. Verizon nor Google (or Alphabet for that matter), have said a word about putting in a bid for AOL.