Verizon Closes $4.5 Billion Yahoo Deal, Marissa Mayer Resigns

Marissa Mayer Yahoo TV Production failure
AP Photo/Eric Risberg

Verizon has completed its acquisition of the operating business of Yahoo for $4.48 billion, which coupled with AOL creates what the telco boasts is a global digital-media powerhouse that reaches more than 1 billion consumers.

As expected, Yahoo CEO Marissa Mayer is leaving the company with the deal’s closing. “Given the inherent changes to Marissa Mayer’s role with Yahoo resulting from the closing of the transaction, Mayer has chosen to resign from Yahoo,” the telco said in a statement. “Verizon wishes Mayer well in her future endeavors.”

The merged AOL-Yahoo organization will be called Oath, comprising more than 50 media and technology brands. Tim Armstrong, previously CEO of AOL, is now CEO of Oath, which is part of Verizon’s Media and Telematics division.

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Oath - Yahoo - AOL - Verizon

Verizon to Cut More Than 2,000 Jobs at AOL-Yahoo After Yahoo Deal Closes

Verizon expects to cut about 15% of the workforce of the new Oath organization, representing the elimination of about 2,100 jobs.

“The close of this transaction represents a critical step in growing the global scale needed for our digital media company,” Marni Walden, Verizon president of Media and Telematics, said in a statement. “The combined set of assets across Verizon and Oath, from VR to AI, 5G to IoT, from content partnerships to originals, will create exciting new ways to captivate audiences across the globe.”

The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, Build Studios, Yahoo Finance, and Yahoo Mail.

Mayer exits Yahoo with stock holdings worth more than $200 million. The company hired Mayer, a former top engineering exec at Google, in 2012 hoping she could turn around Yahoo — once among the strongest brands in the internet sector. But after four years of steady revenue declines and shifts in strategy, Mayer and the Yahoo board opted to sell the company to Verizon last summer.

On Mayer’s watch, Yahoo was hit by two of the biggest security breaches in internet history, resulting in the theft of info on more than 1 billion user accounts. Earlier this year Yahoo’s board said it would not pay an annual bonus to Mayer because of her handling of the incidents, and she also did not receive an equity grant for 2017. The hacks led Verizon to cut $350 million from the purchase price for Yahoo’s internet businesses.

“It’s been my great honor and privilege to be a part of this team for the last five years,” Mayer wrote in a post on Tumblr. “Together, we have rebuilt, reinvented, strengthened, and modernized our products, our business, and our company. Mayer led the acquisition of Tumblr for $1.1 billion in 2013, her biggest acquisition as CEO of Yahoo; the company eventually wrote off more than half the value ascribed to Tumblr.

In her post, Mayer noted that Yahoo’s stock price more than tripled since she joined in July 2012, resulting in an increase of $43 billion in market capitalization. But the stock performance was entirely due to Yahoo’s investment holdings in Chinese ecommerce giant Alibaba Group, which predated Mayer’s tenure.

Yahoo Inc., meanwhile, as previously announced will change its name to “Altaba Inc.” effective June 16. The company’s remaining assets include a 15% equity stake in Alibaba; a 36% equity stake in Yahoo Japan; and Excalibur IP LLC, which owns certain patent assets that were not core to Yahoo’s operating business. Altaba’s CEO is Thomas McInerney, former CFO of Barry Diller’s IAC, and the company has relocated its headquarters to New York City.

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  1. Lila says:

    She doesn’t know how to lead a company. She cares more about being a celebrity than working. In her time there she’s managed to layoff people, banned working from home, promote sexism by firing men, and took the company into weird directions like buying Tumblr, and managed to turn Yahoo into a news aggregation site, who needs those as much anymore? She has no idea how to lead. I expect Yahoo to soon become as irrelevant as AOL.

  2. Marissa Mayer destroyed Yahoo and she pockets 200 million. Capitalism is Great!!!!!

    • Lila says:

      Not so much capitalism. I think it’s mostly bad hiring. They hired the wrong person for the job and should have fired her a long time ago. I have no idea why the board of directors kept her for this long.

  3. loco73 says:

    Shocker…she leaves with $200 million worth of stock, plus who knows how much else in bonuses…while 2100 people lose their jobs and the users get their asses handed to them in terms of compromised privacy and security…

    This is what passes for fairness these days…

  4. paully says:

    Marissa is the Typhoid Mary of Silicon Valley.. Go away now..

  5. Gregg says:

    Marissa knew she’d have to start working for a living.

  6. Adam D. Hall says:

    Exactly what will happen to Yahoo View?

  7. Retnan says:

    Will my Yahoo email address stay the same

  8. Kaboom! says:

    Marissa Mayer received $23 million dollars for her severance pay. That’s after $219 million dollars for 4 years of running Yahoo further into the toilet. Yet the liberati are barely complaining about the gross waste of money.

  9. Dick says:

    Resigned?! What a nice phrase for this woman I would have not fired more like I would have never hired in the first place. I would like to know what is really behind some of these places hiring these sort of people. We see this happen over and over again especially in Silicon Valley. Good riddance to her.

  10. Rudy Mario says:

    The only reason she was allowed to stay so long was due to her gender. If a guy was in this positiin, he would have been fired a long long time ago. Now let the feminist attack to my post begin.

  11. cracker says:

    The bigger the failure, the bigger the pay off.

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