Before US market opens for trading today, Yahoo and Verizon are expected to make an official announcement on a $4.8 billion agreement reached by both parties for Yahoo’s core operations and assets.
According to media reports, US telecoms giant Verizon Communications is to buy Yahoo’s search and advertising operations for $5bn (£3.8bn). The two firms were reported on Friday to be in exclusive talks over a possible deal which was eventually reached.
The company had struggled to be profitable. Last week, it announced $440 million loss in the second quarter, but said the board had made “great progress on strategic alternatives”.
The reported price tag for the deal is well below the firm’s $125bn market value at the height of the dot.com boom. But BGC analyst Colin Gillis wrote recently: “We expect any offer in the range of $5-plus billion should be accepted by the Yahoo board to bring the process to a close.”
When the deal finally falls through, Verizon is expected to merge Yahoo with AOL, to create a digital group capable of taking on the likes of Google and Facebook.
