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Yahoo! strikes a long awaited deal with Verizon

So today Verizon VZ 38,83 +0,04 +0,10% has ended the years of speculation about where next for Yahoo! Unfortunately, we could not get stock quote YHOO this time., acquiring it for $4.8bn.

Yahoo! was once an organiser of the Internet, presenting curated feeds of sites in the very early days of the web. In terms of a presentation model, it most closely related a webified version of the Gopher protocol. Indeed it was the default home page of many browsers until the upstart Google came along. Google allowed people to directly search for what they wanted in the web, and not a curated version. Admittedly, Yahoo! did have a search feature, and did crawl the rudimentary web that existed in those days. At the end of a dial-up modem you wanted someone else to have sought out the good quality sites to visit first!

Yahoo! has expanded, providing a mail service, and now runs the Flikr and Tumblr websites for photos and micro-blogging, as well as it’s content, such as news and finance.

Since 2008, it has appeared to have struggled to find a new direction. About the same time it rejected an offer to be acquired by Microsoft Microsoft Corporation 307,26 +2,43 +0,80% for $44bn, claiming it “substantially undervalues” the company. Longer term hind sight shows that the market capitalisation three years later halved to $22bn. It’s purchase of a stake in Chinese e-market concern Alibaba Unfortunately, we could not get stock quote BABA this time. for $1bn in 2005 did lead to an income stream, and an increase element of their value. Yahoo has been uncertain about the future of this stake mainly because of it’s growing tax liability.

Today, Yahoo will be selling its “core” business to Verizon (i.e. not the investment in Alibaba, or of Yahoo! Japan Unfortunately, we could not get stock quote TYO:4689 this time., a separate entity formed as a joint venture with SoftBank Unfortunately, we could not get stock quote TYO:9984 this time. in Japan)

Verizon has its core network business (both mixed and mobile). It already owns AOL, and has a sprawling net of content creation companies, such as TechCrunch. Adding Yahoo! to the mix will help in growing their content-base.

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