Earlier this week, it was announced that Verizon would purchase Yahoo. This deal begins a new life for Yahoo, and the end of a chapter for one of the original independent search engines. The plan to merge Yahoo with old timer AOL, will bring to entities together, with a Verizon work horse that could give significant life to each of the brands.
The deal is for a $4.83 billion dollars. This will include all the Yahoo assets, aside from Yahoo Japan and the holding into the Alibaba Group. Merging AOL and Yahoo should make for a very competitive option to Google and Facebook, which are the two most trafficked sited for web sales. Purchasing Yahoo is a smart choice, as they were once the dominate leader in search engine and web portal, who is struggling to compete, but a company that has many assets that are popular even today, such as fantasy football, Flickr and event Yahoo Mail. All of these have many users, and as we all know, users, or information is key in our day and age.
Stocks initially dropped for both Yahoo and Verizon, but once the deal is complete and the true identity comes to light for both companies, and the merger with AOL, it should play well for all three companies. The IP alone from Yahoo and the consolidation with AOL, and the access to the Verizon IP will drive this into a monster of a company.
It will be interesting to see in the merger where many of the Yahoo assets will end up. Yahoo has many global data centers. AOL on the other hand, is a closed book on the data center situation. When you see a merger like this, it is always interesting to see which group wins out in the infrastructure arena. Will there be a need to consolidate or will there be more expansion to accommodate the potential growth? Regardless of the situation, there are many opportunities for companies to support the upcoming changes to Yahoo.
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