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Verizon Buys Yahoo at a Nearly Pathetic Price…But Why?

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AOL stayed in the past, and that’s why they were bought out. But Yahoo? Verizon just bought them for $4.8 billion.

Last year, Verizon showed its financial superiority by buying out AOL at $4.4 billion.  America Online used to be one of the great monoliths of the internet, back in the days when there were about three functional internet browsers to choose from.  We probably all remember that tell-tale dial up noise and, “You’ve got mail!”  But as time moved on, AOL became essentially obsolete as it was replaced with bigger and better versions of its features.  AOL stayed in the past, and that’s why they were bought out.  But Yahoo?  Verizon just bought them for $4.8 billion.  These two internet giants have been reduced to just under ten billion dollars.  So, what’s Verizon doing with them?

The Build-up

This has been a long-time coming.  Yahoo has been popular for over two decades, and was one of the original internet search engines.  In its inception, Yahoo was revolutionary…that is, until Google came along.  Yahoo failed miserably when it came to keeping up with an internet superpower like Google.  And perhaps, that’s because they’ve been trying too hard.  Yahoo has been working to keep themselves running independently, despite Google nearly taking over internet usage as we know it.  With a streamlined interface, a verb in the dictionary, and a ridiculously popular browser, Google has it all.  Yahoo simply can’t keep up.  They bought the popular social media site, Tumblr, for $1.1 billion last year.  Yahoo ended up seeing about a third of the profits, presumably because they don’t know how to appeal to younger masses.  Ultimately, their downward spiral continued.


What Happens Now?

It all depends on what Verizon will decide to do with the company, in combination with AOL.  Verizon now has control over all of Yahoo’s features, including Tumblr.  And from AOL, they’ve gained popular sites like The Huffington Post.  Verizon has said they will keep most features, though they are unsure what to do with its unpopular search engine.  They have also said that AOL has not proved to be profitable.  The employees at Yahoo, if terminated, are going to be offered heavy severance packages.  Marissa Mayer, chief executive of Yahoo, has an unclear fate.  Truly, the result of these purchases is unpredictable.  Will Verizon soon become a rival to Google?  Only time will tell.


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