Verizon Acquires Yahoo And Plans To Cut 2,000 Jobs
Yahoo's shareholders have voted to approve the sale of the company's assets to Verizon which could result in the loss of thousands of jobs.
The Deal Between Verizon And Yahoo
Verizon's plans to acquire Yahoo — along with AOL — were announced nearly a year ago, but it took almost a year for the details to be worked out. During this time, there were rumors that the deal would fall through, but eventually, things worked out.
In February, it was revealed that Yahoo was the victim of two security breaches that compromised the data of more than one billion users. This prompted the company to reduce its sale price by $350 million reducing the final cost to $4.48 billion.
Upon completion of the acquisition, Verizon intends to use AOL and Yahoo to create a new digital company known as Oath. During this process, as many as 2,000 jobs may be lost.
While losing 15 percent of their workforce does not bode well for the company's employees, Yahoo has seen its stock prices rise to a 17-year high. News of the impending merger sent Yahoo's stock prices soaring to $54.80 which is the highest they have been since September 2000.
"Oath's strategy is to lead the global brand space," an AOL spokesperson told CNN Tech. "Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy."
Oath will be led by AOL CEO Tim Armstrong. As for former Yahoo CEO Marissa Mayer, it has previously been reported that she will not be part of Oath's leadership team though she will receive a generous compensation package.
Beyond vague comments concerning leading the "global brand space," we don't know Verizon's plans for Oath.
Yahoo And AOL's Fate
Verizon's acquisition of Yahoo and AOL mark an inglorious end to two of the earliest tech companies. During the 1990s, AOL was almost synonymous with internet access for millions of Americans. Yahoo — with its popular mail and messaging service — helped popularize the idea of the internet as a means of keeping in touch with friends, family, and work colleagues.
Despite their long history, both companies have been on the decline in recent decades. AOL's fall was due to competition from cable providers and Yahoo faced the search giant, Google.
Eric Brackett Tech Times editor Eric Brackett is a tech junkie and a gamer, covering science and technology. Follow him on Facebook and Twitter for updates and his random thoughts on the latest trends in gaming, tech, and comic books.