Verizon preps $5bn Yahoo deal

US telecoms giant Verizon Communications is set to continue its spending spree by forking out US$5bn to buy the core operations of internet outfit Yahoo.

Marissa Mayer

Verizon, which took a 24.5% stake in Awesomeness TV earlier this year, will acquire Yahoo’s search and advertising divisions as part of the deal, leaving the internet firm with its $40bn stakes in Asian internet portals Alibaba and Yahoo Japan.

Yahoo, once valued in excess of US$125bn, has struggled to keep up with rivals such as Google over recent years and last week reported a US$440m loss for the second quarter of 2016.

The company had been considering deals for several months and in February said it was looking at “strategic alternatives” for parts of the business.

Verizon, meanwhile, is expected to combine Yahoo’s operations with AOL, which it bought for US$4.4bn in 2015. That deal gave it content providers such as the Huffington Post, Engadget and Techcrunch.

The telecoms giant has also launched its mobile streamer service Go90, with programming from Ben Affleck and Matt Damon in the works, and has invested in US-Hispanic focused media agency MiTu.

The Yahoo deal is expected to be confirmed later today, with Yahoo CEO Marissa Mayer set to step down.