Verizon is planning to place a bid for Yahoo some time next week, and Google is also weighing making an offer. Bloomberg reports that Verizon is interested in Yahoo’s core internet business as well as Yahoo Japan. Their plan would entail installing AOL CEO Tim Armstrong as CEO and ousting Marissa Mayer.
Verizon has been expressing an interest in Yahoo for quite some time. The firm recently acquired AOL, and AOL and Yahoo have a lot in common. Both companies make a lot of their money by developing internet content and selling ads on it. It is believed that part of Verizon’s interest in AOL stemmed from its ad technology business, with the firm seeing an opportunity to gather data from its mobile and broadband networks in order to help AOL target ads on its content more effectively.
Verizon’s interest in Yahoo could be based on a similar sentiment. As advertisers gravitate toward making a few big advertising deals instead of a bunch of small ones, bigger media companies are better positioned to attract top prices. Having AOL and Yahoo both under its helm would enable Verizon to offer packages to advertisers that include media brands from the two companies.
Google still considering a bid
Google might also put an offer on the table. The firm has not stated exactly why it is interested in Yahoo, but Google is more likely to be interested in some of Yahoo’s software products, such as its search engine, Yahoo Mail, and Tumblr as it has vast experience in managing ad networks and software products. This could help Yahoo to attract top programming talent. Nevertheless, Google is not known for creating its own content so Yahoo’s content business is less likely to fit in well with the firm.
While an acquisition of Yahoo would give Google a boost in search, email, and ads, it is possible that such a move would raise some regulatory scrutiny.
Meanwhile, several names that have been linked with a possible bid in the past are no longer considering making an offer, including Microsoft, Comcast, and AT&T.
CNBC is reporting that Yahoo has moved its deadline for bids back by one more week to April 11.
Despite a concerted effort by Mayer to turn the firm around, Yahoo has been struggling in recent years. Activist investors pressured them to make “significant changes”, leading to the move to put the firm’s core internet business up for sale.
