E Why Is Verizon Buying Yahoo!, Again?

If you haven’t noticed, the market has all of a sudden turned against Verizon’s (NASDAQ:VZ) decision to buy Yahoo! (NASDAQ:YHOO), at least based on media coverage. The two companies agreed on an all-cash acquisition fee of about $4.83 billion—some reports are putting the figure at $4.8 billion—which is pretty much the optimal valuation of Yahoo!’s core business.

This comes following a period of stalemate in which Yahoo! had appeared certain to sell below the current numbers that are being drafted across media platforms. In May this year, there were reports that bids had come in in the region of $2-$3 billion, which at the time, was roughly half Yahoo! Valuation of its core business, the one that’s being sold.

The media was pretty critical about the potential sale of the business at such low figures, but now that Verizon agreed to pay $5 billion, everyone seems to be perplexed by what’s this is all for. So did Verizon take a shot in the dark by acquiring Yahoo!’s core business? Let’s try to answer that question.

To begin, let’s look at Yahoo’s troubles. The company’s problems with its core business are deeply rooted in structure rather than service offering. In other words, Yahoo!’s core includes a wide variety of services, but it never really stamped authority in either of them. Of course, this meant that it commanded smaller numbers in terms of business compared to rivals. And with smaller numbers, comes the ability to interact with customers on a more personal level.

So is this why I keep reading that Yahoo! has one of the best customer support channels amongt internet information providers? I have been trying to see whether those channels included a Yahoo support number but all I could come across is what online customer service platforms offer. In that case, I would have to dismiss the claim for now, but that’s a case I could investigate further in the future.

Either way, every internet-based company seems to have customer service related problems including Yahoo!’s killer, Alphabet (NASDAQ:GOOG). However, Alphabet’s Google has been able to compensate for poor customer service with quality results when it comes to the product offering.

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Disclosure: The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor ...

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Dhaval Mohammed Somesh 4 years ago Member's comment

It's interesting to see the fall of Yahoo $YHOO over the years because of boneheaded decisions. It comes back to bite them now as we see them sell for roughly $5 billion. I'll never forget in 1998 the chance they had to buy google $GOOG for $1 million.

Sam Anwar 4 years ago Member's comment

Yeah, well Yahoo can play on a "bigger stage" so to speak because of the fact that they are going to merge with AOL and help propel Verizon and effectively compete with the likes of Facebook and Google.