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VERIZON BUYING YAHOO

Stephanie reckling, College corner editor

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Verizon, the mobile phone company, and Yahoo, the search engine, instant messaging, and email service has a deal in the works. Verizon plans to buy Yahoo for $4.83 billion, within the first quarter of 2017.

Different companies, like Microsoft, who offered $45 billion for Yahoo in 2008, have attempted to purchase Yahoo. But, Yahoo rejected the deals, up until this point. So, what made Verizon decide to purchase Yahoo and what made Yahoo decide to accept the deal (besides the high purchasing price)?

Yahoo continues to receive heavy traffic, grossing millions of users each day. People use this service check their e-mail, view news, interact with friends, and more. Although some loyal users of Google Chrome or other browsers argue that Yahoo runs obsolete, this is clearly not the case. Yahoo continues to run strong, since 1995.

As of 2013, Yahoo has acquired Tumblr to its services, expanding their demographic reach to the youth. So, Verizon can, with this deal, tap into the networks of Yahoo, Tumblr, and more, on a ginormous scale. Just last year Verizon bought AOL, and this must have proved successful since they want to purchase another media company. With the power of media companies, Verizon can tap into the online advertising business.

Marissa Mayer, the president and chief executive officer of Yahoo, hopes to reimburse Yahoo with a fresh energy.  Some people have called out Mayer for the decision and wonder whether the integrity and team of Yahoo will change. Mayer aims to integrate the Yahoo team with the Verizon team. Hopefully, the deal will work out smoothly, for the sake of both companies.

 

 

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1 Comment

One Response to “VERIZON BUYING YAHOO”

  1. Jonathan Story on April 25th, 2017 12:13 pm

    Hello Stephanie!

    This is a very interesting article (and I just found the time today to read it) but the facts are not entirely true. The reason that Yahoo is interested in Verizon’s offer to buy them up is because they planned to turn a record quarter in 2010, finally beating off Google Inc. and increase their revenue from just short of 1.8 billion to over 9 billion dollars a year. Unfortunately for Yahoo, Google Inc. came out with the new and improved (and generically default) Google Search Engine, which pretty much everyone switched to. The reason Yahoo is now accepting an offer for 4.83 billion now instead of 45 billion then? Because now, compared to google, they’re worth just above a slab of concrete. Since 2008, Yahoo has gone from making around 2.9 billion a year in gross profit to around 1.8 billion in gross profit, and while these are astronomical numbers, they have to be even bigger than that to survive in possibly the most trafficked industry worldwide. 1.8 billion a year is if everyone who used your search engine on a yearly scale gave you less than 30 cents a piece, and that is paltry profits for the system at hand. While it is accurate to say they do gross millions of users a day, when people say it is obsolete, it is because they are referring to Google’s high billions a day and trillions a year, and even Bing’s high millions – nearly 600 million- a day. In other terms, Google owns about 66% of the search industry, Bing is around 29% (due to their deals with Microsoft) and the remaining 5 percent is mashed up with local search engines such as Swagbucks. Yahoo gets about 2-3% of the industry. Yahoo is expected to either be completely bought out or go out of business by 2019, which is unfortunate, but then again, this is capitalism in the free market economy. One of these days, even Google is going to get beat.

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