Yahoo’s Sale to Verizon Ends an Era for a Web Pioneer

Yahoo’s board has agreed to sell the company’s core internet operations and land holdings to Verizon Communications for $4.8 billion.

After the sale, Yahoo shareholders will be left with about $41 billion in investments in the Chinese e-commerce company Alibaba, as well as Yahoo Japan and a small portfolio of patents. That compares with Yahoo’s peak value of more than $125 billion, reached in January 2000. Marissa Mayer, Yahoo’s chief executive, is not expected to join Verizon, but she is due to receive a severance payout worth about $57 million, according to Equilar, a compensation research firm.

For Verizon, the deal simply adds another piece to the digital media and advertising business it is trying to build. Verizon is building a portfolio of online content and aiming to monetize it via advertising. Its current assets include Huffington Post and TechCrunch, which it acquired in last year’s AOL deal, and its own mobile video app, called go90. Acquiring Yahoo will bring in millions more viewers from Yahoo sites like Finance, Sports and News. Verizon also hopes to plug data derived from smartphones into AOL, and now Yahoo’s, digital advertising systems, and it is aiming to build a competitor to online advertising giants Facebook and Google. But a combined Yahoo and AOL would be far outpaced by its now far-larger rivals.

The companies said the deal is subject to customary closing conditions, including approval by Yahoo’s shareholders, and is expected to close in early 2017. Until the closing, the companies said, Yahoo will continue to operate independently.