Verizon has tasked AOL CEO Tim Armstrong with exploring a possible Yahoo acquisition, according to a Bloomberg report. Verizon hasn’t officially made an offer for Yahoo, but the high-profile appointment could be seen as a sign that the telco is seriously considering it.
Verizon CFO Fran Shammo told investors in December that the company was open to taking a look at Yahoo if the deal made sense for Verizon’s shareholders. However, Shammo also cautioned that it was too early to talk about any such deal.
Yahoo announced a multi-pronged turn-around plan during its latest earnings call earlier this month. The company is slashing its workforce by 15%, spinning off and shuttering some non-essential businesses and concentrating on key assets like its homepage, search and mobile. In parallel, it also announced that the board is exploring the sale of its key Internet assets.
Yahoo’s massive audience could prop up Verizon’s own content businesses. The telco has gained a sizable video business as well as a number of large consumer and technology sites as part of its AOL acquisition. More recently, it has tried to play to millennial audiences with its new Go90 video service.
Yahoo, on the other hand, has always been able to aggregate huge numbers of users, but has failed to build a media business on top of that audience. Last year, it shuttered its Yahoo Screen video service, and wrote off $42 million invested in exclusive long-form content like “Community.”