@ThingsExpo Authors: Elizabeth White, Liz McMillan, Mehdi Daoudi, Yeshim Deniz, Pat Romanski

Related Topics: @CloudExpo, Mobile IoT, @ThingsExpo

@CloudExpo: Blog Post

Verizon to Acquire Yahoo's Operating Business | @CloudExpo @Verizon #IoT #M2M #API #Cloud

The addition of Yahoo to Verizon and AOL will create one of the largest portfolios of owned and partnered global brands

Verizon Communications Inc. (NYSE, Nasdaq: VZ) and Yahoo! Inc. (Nasdaq: YHOO) have entered into a definitive agreement under which Verizon will acquire Yahoo's operating business for approximately $4.83 billion in cash, subject to customary closing adjustments.

Yahoo informs, connects and entertains a global audience of more than 1 billion monthly active users** -- including 600 million monthly active mobile users*** through its search, communications and digital content products. Yahoo also connects advertisers with target audiences through a streamlined advertising technology stack that combines the power of their data, content and technology.

Lowell McAdam, Verizon Chairman and CEO, said: "Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers. The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising."

Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.

Marissa Mayer, CEO of Yahoo, said: "Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL. The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo. This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social."

Mayer added, "Yahoo and AOL popularized the Internet, email, search and real-time media. It's poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile. We have a terrific, loyal, experienced and quality team, and I couldn't be prouder of our achievements to date, including building our new lines of business to $1.6 billion in GAAP revenue in 2015. I'm excited to extend our momentum through this transaction."

Tim Armstrong, CEO of AOL, said: "Our mission at AOL is to build brands people love, and we will continue to invest in and grow them. Yahoo has been a long-time investor in premium content and created some of the most beloved consumer brands in key categories like sports, news and finance."

Under Armstrong, AOL has invested in and grown global premium brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com, and market-leading programmatic platforms -- including ONE by AOL for both advertisers and publishers.

Armstrong added, "We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo's full potential, building upon our collective synergies, and strengthening and accelerating that growth. Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers."

The addition of Yahoo to Verizon and AOL will create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities. Combined, AOL and Yahoo will have more than 25 brands in its portfolio for continued investment and growth. Yahoo's key assets include market-leading premium content brands in major categories including finance, news and sports, as well as one of the most popular email services globally with approximately 225 million monthly active users****. Additional technology assets in the advertising space include Brightroll, a programmatic demand-side platform; Flurry, an independent mobile apps analytics service; and Gemini, a native and search advertising solution.

The deal is subject to customary closing conditions, approval by Yahoo's shareholders, and regulatory approvals, and is expected to close in Q1 of 2017. Until the closing, Yahoo will continue to operate independently, offering and improving its own products and services for users, advertisers, developers and partners.

Verizon will generally issue cash-settled Verizon RSUs for Yahoo RSUs that are outstanding at the close.

The sale does not include Yahoo's cash, its shares in Alibaba Group Holdings, its shares in Yahoo Japan, Yahoo's convertible notes, certain minority investments, and Yahoo's non-core patents (called the Excalibur portfolio). These assets will continue to be held by Yahoo, which will change its name at closing and become a registered, publicly traded investment company. Yahoo will provide additional information about the investment company at a future date.

Yahoo intends to return substantially all of its net cash to shareholders and will determine and communicate a specific capital return strategy at an appropriate time.

LionTree Advisors, LLC, Allen & Company LLC, Bank of America Merrill Lynch and Guggenheim Securities, LLC are acting as financial advisors to Verizon. Wachtell, Lipton, Rosen & Katz, Gibson, Dunn & Crutcher LLP, Covington & Burling LLP and Winston & Strawn LLP are acting as legal advisors to Verizon.

Goldman, Sachs & Co., J.P. Morgan Securities LLC and PJT Partners are acting as financial advisors to the Yahoo Board and its Strategic Review Committee. Skadden, Arps, Slate, Meagher & Flom LLP, Wilson Sonsini Goodrich & Rosati and Weil Gotshal & Manges LLP are acting as legal advisors to Yahoo. Cravath, Swaine & Moore LLP is independent legal advisor to Yahoo's Strategic Review Committee.

Yahoo will hold an investor call at 5:30 a.m. Pacific/8:30 a.m. Eastern today. Investors can dial in at (866) 593-9949 and investors outside the U.S. can dial in at (973) 935-8154, using the conference ID 55971720. The call will be hosted by Yahoo CEO Marissa Mayer and Yahoo CFO Ken Goldman. Yahoo will also make the Chair of the Strategic Review Committee, Tom McInerney, and Yahoo Chairman of the Board Maynard Webb available for questions.

Verizon will announce second-quarter 2016 results tomorrow, July 26. To provide further context for investors about this transaction and other strategic initiatives, McAdam will participate in Verizon's earnings webcast beginning 8:30 a.m. Eastern tomorrow. Access instructions and presentation materials, including Verizon's earnings release, will be available at 7 a.m. on Verizon's Investor Relations website, www.verizon.com/about/investors/.

*Based on Yahoo internal metrics, Jan. 2016 and AOL Internal, June 2016
**Yahoo internal user metrics, Jan. 2016
***Yahoo internal user metrics, Jan 2016
****Yahoo internal user metrics, Jan. 2016.  Mail monthly active users includes 58M IMAP/POP only users – ie. Yahoo monthly users that access their mail using other companies mail application

@ThingsExpo - The World's Largest 'Internet of Things' Event, November 1-3, 2016, at the Santa Clara Convention Center!

Secrets of Sponsors and ExhibitorsHere
Secrets of Cloud Expo SpeakersHere

All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.

@CloudExpo / @ThingsExpo 2016 Silicon Valley
(November 1-3, 2016, Santa Clara Convention Center, CA)

@CloudExpo / @ThingsExpo 2017 New York
(June 6-8, 2017, Javits Center, Manhattan)

With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be.

Register for @CloudExpo/@ThingsExpo 'FREE' Before Friday! Here

Track 1: Enterprise Cloud & Digital Transformation
Track 2: Microservices | Cloud Hot Topics
Track 3: Internet of Things & Cloud
Track 4: APIs & Cloud Security
Track 5: Big Data Analytics
Track 6: DevOps, Continuous Delivery & Containers
Track 7: Enterprise IoT & IIoT
Track 8: IoT Developer
Track 9: Consumer IoT | IoT Hot Topics

Delegates to Cloud Expo | @ThingsExpo will be able to attend 9 simultaneous, information-packed education tracks.

There are over 120 breakout sessions in all, with Keynotes, General Sessions, and Power Panels adding to three days of incredibly rich presentations and content.

Join @CloudExpo | @ThingsExpo conference chair Roger Strukhoff (@IoT2040), June 7-9, 2016 in New York City, for three days of intense 'Internet of Things' discussion and focus, including Big Data's indispensable role in IoT, Smart Grids and Industrial Internet of Things, Wearables and Consumer IoT, as well as (new) IoT's use in Vertical Markets.

About SYS-CON Media & Events
SYS-CON Media (www.sys-con.com) has since 1994 been connecting technology companies and customers through a comprehensive content stream - featuring over forty focused subject areas, from Cloud Computing to Web Security - interwoven with market-leading full-scale conferences produced by SYS-CON Events. The company's internationally recognized brands include among others Cloud Expo® (@CloudExpo), Big Data Expo® (@BigDataExpo), DevOps Summit (@DevOpsSummit), @ThingsExpo® (@ThingsExpo), Containers Expo (@ContainersExpo) and Microservices Expo (@MicroservicesE).

Cloud Expo®, Big Data Expo® and @ThingsExpo® are registered trademarks of Cloud Expo, Inc., a SYS-CON Events company.

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