Verizon Buys Yahoo In $4.8 Billion Attempt To Bore The Internet To Death

from the hip-to-be-square dept

Mon, Jul 25th 2016 10:41am — Karl Bode

Remember when Yahoo rejected a $44.6 billion offer by Microsoft? Good times. After months of redundant rumors about the bidding process, Verizon has confirmed that it has acquired Yahoo in a $4.8 billion all cash deal. According to Verizon's press announcement, the acquisition of Yahoo's stumbling empire will position Verizon as a superpower in the new media age, helping the formerly stodgy telco in its pivot toward slinging ads at Millennials. As you might expect, the press release trots out AOL boss Tim Armstrong to sell a dull deal he claims will finally let poor Yahoo shine:

"We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth. Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers."

Verizon executives have acquired Yahoo and AOL in the belief they can pivot from a government-pampered telco mono/duopoly to a Facebook and Google-esque advertising juggernaut. And while there is little doubt that the advertising technology acquired from these deals will be useful in Verizon's quest to monetize the company's 140 million mobile subscribers, there's been little to no evidence that Verizon is actually competent enough to execute its own game plan.

Verizon's jumping into the media and advertising game because mobile and fixed broadband subscriber growth is slowing to a point where it's incredibly profitable, but just not profitable enough for Wall Street. And if you've followed the net neutrality fights, you're probably aware that most telcos believe they're absolutely entitled to a larger share of ad revenues -- simply because they built the networks these services run over. The problem (for these telecom companies) is that most of them have spent so long as government-pampered duopolies focusing on lobbying and turf protection, innovation and competition are alien concepts.

As a result, pivoting from stodgy telco to hip Millennial-focused ad empire has had an almost comical learning curve for Verizon execs. You might recall it began with Verizon launching its own tech blog dubbed Sugarstring, where its reporters weren't allowed to even mention subjects like net neutrality or surveillance. As that effort was busy imploding, Verizon's advertising arm was busted covertly modifying wireless user data packets to track consumer behavior around the Internet. This is of course all while Verizon was busy trying to deliver a killing blow to net neutrality; not exactly endearing itself to its target audience.

After several years of stumbling, Verizon launched a new, hip streaming video service Go90, which by most measurements has been a disappointment, despite Verizon's anti-competitive practice of zero rating the service. Now we're to believe that the combination of multiple, marginal 90s brands will somehow be the missing ingredient needed to transform Verizon into a media and advertising god, despite the fact Verizon has shown minimal competence and an aggressive, active disdain for the users it's trying to target. Good luck with that, Verizon.

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Filed Under: advertising, mergers, search
Companies: aol, verizon, yahoo

34 Comments

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Al Borland, 25 Jul 2016 @ 11:23am

I don't think so Tim.
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Tobias Harms (profile), 25 Jul 2016 @ 11:24am

The market speak is strong in this one...
... I got as far as "collective synergies" before my eyes glazed over...
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martin, 25 Jul 2016 @ 11:31am

That's just too funny.

"That parrot is definitely dead"
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Ninja (profile), 25 Jul 2016 @ 11:31am

In another news, Verizon to buy Kodak to enter the camera market and Nokia to enter the mobile phone market. "WE WILL CONQUER THE WORLD!! ALL MILLENIALS HAIL THE NEW OVERLORDS!! RAWWR" an executive was quoted yelling.
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Hephaestus (profile), 25 Jul 2016 @ 11:38am

History... Rinse, Lather, Repeat
The past News Corp - MySpace deal is a good indication of what a non-internet company will do for an internet company.
Five years down the line, the members of techdirt should get together, pool our lunch money, and buy Yahoo ...
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Anonymous Coward, 25 Jul 2016 @ 11:48am

At least it makes a little more sense than buying AOL. That's not saying much though.
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Yakko Warner (profile), 25 Jul 2016 @ 12:18pm

Re:
It's just pining for the dialup squeals.
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Anonymous Coward, 25 Jul 2016 @ 12:21pm

Re:
I thought Microsoft bought Nokia, are they selling them¿
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Anonymous Coward, 25 Jul 2016 @ 12:34pm

Re: History... Rinse, Lather, Repeat
I've got $30 saved. I expect to be able to purchase it week after next.
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Anonymous Coward, 25 Jul 2016 @ 12:40pm

AOL and Yahoo in the same news release?
I thought I was reading a placard at the Smithsonian, next to the Blackberry exhibit, when I saw Yahoo and AOL mentioned in the same article.
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Uriel-238 (profile), 25 Jul 2016 @ 12:43pm

I wonder if this will change the Mozilla / Yahoo contract.
Firefox has Yahoo as a default search engine, which I had to change instantly after any installation. But their substitute for Google Now turns it into Yahoo search which cannot be changed without some incantations and a virgin sacrifice.

I ended up uninstalling Firefox from my phone since there was no evident means to undo the change or otherwise edit my parameters. Not for want of research to do just that.
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Padpaw (profile), 25 Jul 2016 @ 12:53pm

time to change all the accounts associated with my yahoo mail then.
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TheResidentSkeptic (profile), 25 Jul 2016 @ 12:55pm

Update to Oxford English Dictionary
Irrelevant: The combination of Verizon + AOL + Yahoo.
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Anonymous Coward, 25 Jul 2016 @ 1:01pm

If you don,t learn from history you are doomed to repeat it,
big corporation buys web media company,
in a few years it does nothing with it.
fails ,writes it off as a loss .News at 11.
Big corporation launches streaming service, no one watchs it.
Maybe yahoo patents
are worth a few million.
In a few months time i expect to see 1000,s of yahoo
workers laid off .
I wonder how many web video streaming services in the us are
making a profit .
Theres used to be a new social media service launched
every month ,
now its a new streaming service .
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orbitalinsertion (profile), 25 Jul 2016 @ 1:22pm

OMG it's a freakin' zombie apocalypse.
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Anonymous Anonymous Coward (profile), 25 Jul 2016 @ 1:29pm

The really real real reason.
Isn't it possible that Verizon is making sooooo much money from screwing their telephone and broadband customers that they need a tax write off?
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DanWaggoner, 25 Jul 2016 @ 1:32pm

Re: History... Rinse, Lather, Repeat
agreed
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Anonymous Coward, 25 Jul 2016 @ 1:33pm

Re: History... Rinse, Lather, Repeat
But what will we do with the other four dollars?
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Anonymous Coward, 25 Jul 2016 @ 1:36pm

6 months down the line:

I'm sorry but we're laying off everyone. Ordinary workers get nothing.

CEO gets $43 million....YAHOO!
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Anonymous Coward, 25 Jul 2016 @ 2:04pm

just die already.
Honestly, I thought yahoo was irrelevant/extinct. Why would anyone want to buy them? Furthermore why would anyone still use them?

When I first used the internet (1997) I got on yahoo because it had categories of linked/similar sites. But once Google came around I never went back to yahoo. And I hadn't heard of anyone I know go back to yahoo either.

How could they claim to be worth even more than 4 Billion? Guess all the hardware and office space is worth something.
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Coward, 25 Jul 2016 @ 2:24pm

What we all know...
... But aren't saying. Yahoo owns tumblr, what will all the porn workers use nownow?
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Jigsy (profile), 25 Jul 2016 @ 2:57pm

And knowing Yahoo! users, they'll probably be taxed $2.90 for using an unsupported e-mail rather than Verizons...
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Anonymous Coward, 25 Jul 2016 @ 3:28pm

Re:
That joke might be before some of the readers were born.

But hilarious nonetheless.
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tom (profile), 25 Jul 2016 @ 4:08pm

Verizon buys Yahoo hoping to cash in on ad revenue while ignoring the fact the one of the fastest growing tech sectors is ad and script blocking.
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SpaceLifeForm, 25 Jul 2016 @ 4:44pm

Yahoo useful in 1994, dying pre-y2k
This from one that downloaded mosaic
via ftp to run on a real xterm.
So I could *use* Yahoo.
It was actually good 22 years ago.
Yes, I am pre-internet.
Hell, I am pre-AOL dialup!
Do not question me.
I've been doing IT longer
than most of you have been alive.
Back from stoneages of 1200baud
modems, x.25, 10 inch flopies.
Removeable 240mb disc drives.
Greenbar. Bi-directional file transfer
between mainframes and Tandems before
FTP existed.
And computers with 10mb ram.
Yeah, 10, not 8, not 16. Ten.
9 track tape. uucp. Oh and do not
ever forget hollerith. Best invention
ever! Machine and human readable.
Wrong, I just recalled baudot code on
yellow punched paper tape with a
real teletype.
(which is where baud rate came from)

Finding bugs in microcode
(do you really know what microcode is?
Do any of you know what microcode
djump means? Maybe a few)

Yep, old and still fucking ticking!
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Mark Wing, 25 Jul 2016 @ 5:18pm

Yahoo is hot! Wait, I was thinking of Selna Gomez.
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JBDragon (profile), 25 Jul 2016 @ 5:23pm

Verizon must really be raping their customers to afford to keep buying sinking ships like AOL and Yahoo.
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Derek Kerton (profile), 25 Jul 2016 @ 5:34pm

The Title Bout
And, just like that, Karl wins the Internet's "Headline of The Week" competition.
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Anonymous Coward, 25 Jul 2016 @ 5:57pm

on the positive side, this is probably going to be fun to watch.
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Meh, 25 Jul 2016 @ 6:31pm

I'd call this a bad deal like Microsoft buying nokia, hp buying palm etc then end up writing all that deal off for nothing. But Verizon has been screwing the common user for so long - he'll with Verizon. Enjoy the poison pill.
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Anonymous Coward, 25 Jul 2016 @ 11:29pm

Re: Yahoo useful in 1994, dying pre-y2k
10 inch flopies???
You must be a fisherman, as the size has grown with the telling of the tale. (The largest floppies were 8 inch).
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Andrew D. Todd, 26 Jul 2016 @ 12:37am

Re: Re: Yahoo useful in 1994, dying pre-y2k
Well, on the old IBM 1130, the removable disks were something over a foot in diameter, I don't know if they were technically floppies or not, they may have been rigid removable disks like Iomega Zip Disks. The IBM 1130 was manufactured about, I think, 1965 (first-generation transistor, with magnetic core memory), and had made its way, on a hand-me-down basis, to a university computer lab by 1981.

If you want to tell real "fish stories," it helps to have been professionally engaged in whaling or shark-catching. Parenthetically Gavin Maxwell, in his Harpoon Venture, a memoir of actual shark-catching in Scotland in the 1940's, observes pragmatically that the shark which gets away is by definition the biggest one, because it is strong enough to simply wreck the fishing tackle in its bid for freedom.
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Anon, 26 Jul 2016 @ 3:34am

Bernoulli
Those were not technically floppies, they were Bernoulli disks, usually 20 megs at that time.
https://en.wikipedia.org/wiki/Bernoulli_Box
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John Fenderson (profile), 26 Jul 2016 @ 7:34am

Re: Bernoulli
Bernoulli disks were technically floppies (they contained a flexible magnetic disk). Here's a fun examination of them, for those of us who consider this sort of thing "fun": https://youtu.be/TpqiahBKX7w
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