Yahoo’s Web properties are now up for grab following an approval by the company’s shareholders. The $4.5 billion sale deal of Yahoo’s key businesses to Verizon is expected to close on Tuesday, June 13 and according to analysts, the two are better positioned together. Apparently, this should have happened over a year ago but the same has been derailed by massive privacy breaches.
The development will result into Yahoo becoming part of a new Verizon unit called Oath, which intends to expand its news, sports, entertainment, and finance as well as lifestyle coverage. Tim Armstrong, who will now take over as the CEO of Verizon’s subsidiary says that his focus will be to make Oath properties a place consumers can visit every day.
Verizon’s strategy in sustaining its business
Verizon is seeking for the third position in the lucrative field of digital advertising. The company says that its sole purpose of buying Yahoo’s core business is to take on Alphabet Inc (NASDAQ:GOOGL) Google and Facebook Inc (NASDAQ:FB), which have been enjoying market domination. The company will be relying heavily on online ads and particularly targeted ads as a potential source of growth.
Yahoo’s Web audience is expected to help in pushing deeper Verizon’s intention of expanding beyond its central business of connecting people. According to CFRA Research’s Angelo Zino, Verizon has turned into a no-growth business but the ad business should take it to the next level.
But the market seems very competitive
It seems like the combined business will have to up its game in order to compete for people’s attention. The market is not only slippery but also very competitive. Apart from Facebook and Google, which together draw the attention of half the world’s spending on digital ads, there are also smaller players the likes of Snapchat also drawing advertisers.
Popular sites such as Amazon and Netflix also suck up time spent online. Microsoft, which owns LinkedIn is also seeking for a share of the ad pie while Twitter, although small is quickly swinging into action. However, Verizon seems ready to rock despite the competition. Meanwhile, Verizon’s stock was trading at $46.19 a fall of $0.31 or 0.67%.
