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July 25, 2016, 12:23 p.m.
Business Models
LINK: www.bloomberg.com  ➚   |   Posted by: Ricardo Bilton   |   July 25, 2016

It’s official: Verizon has acquired Yahoo. The companies finally announced the $5 billion deal early Monday, after weeks of rumors all but confirmed the news. The move finally puts to rest the years of speculation about the web pioneer whose fate has looked increasingly grim. For Verizon, which acquired AOL last year, it marks yet another major investment in not only content but ad tech as well.

The move also has some implications for the digital publishing industry as a whole, which will no doubt see some significant shifts thanks to the deal. Here are a few takeaways.

  • Are 20-year old tech companies really that different from legacy publishers who migrated to the web? Perhaps not.

  • It’s worth noting that even Yahoo, despite its massive size, struggled to nail digital video:

  • Also: Change is hard, especially for big companies. Could Yahoo’s fate have been averted? Perhaps not.

  • Yahoo’s troubles also offer a reminder that scale isn’t everything. Yahoo site traffic just trailed behind traffic to Facebook in the U.S. in May, according to comScore. AOL head Tim Armstrong, however, argues that scale, on the contrary, is the only way at AOL and Yahoo can keep up.

  • Verizon, which already owns a handful of big media sites via its AOL acquisition, now owns a few more. So far, though, Verizon plans to keep them separate. Still, there are residual concerns about the telecom giant having such a major stake in news, thanks to its mishandling of tech site SugarString.

Photo of Yahoo logo by Neon Tommy used under a Creative Commons license.

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