Verizon closed its $4.5 billion acquisition of Yahoo’s core business this week and with it came Yahoo CEO Marissa Mayer's resignation and news of layoffs.
Reuters news agency reported Verizon will slash at least 2,000 jobs as it integrates Yahoo into AOL, which Verizon bought two years ago. Former AOL Chief Executive Tim Armstrong confirmed the report in an interview with CNBC.
Armstrong revealed 2,100 jobs would be lost during this transition, mainly impacting public resources, back office functions and areas of product overlap.
Introducing Oath and Altaba
Armstrong is taking on the role of CEO of the newly created company resulting from the AOL–Yahoo merger, named Oath.
Oath plans to use Yahoo’s reach to compete with Google and Facebook for online advertising.
Yahoo currently has 200 million unique monthly visitors to its sites. Combined with the 150 million unique monthly AOL users, Oath has an attractive advertising proposition.
While Yahoo will cease being traded as a public company as part of the deal, Verizon plans to turn the remaining Yahoo assets into an investment company, with stakes in Chinese internet giant Alibaba and Yahoo Japan. On June 16, it will change its name to Altaba and will begin trading under the ticker symbol "AABA" on June 19.
Mayer Exits, Returns to Using Gmail
In a statement posted on Tumblr, Mayer confirmed the closure of deal and her departure from the company. Her statement read:
“323 days ago, we announced that Verizon would be acquiring Yahoo’s operating business. Today, I can announce that the transaction has officially closed.
“While reaching this moment has certainly been a long road traveled, it marks the end of an era for Yahoo, as well as the beginning of a new chapter — it’s an emotional time for all of us. Given the inherent changes to my role, I’ll be leaving the company. However, I want all of you to know that I’m brimming with nostalgia, gratitude and optimism.”
After listing the company's achievements she added:
“From day one, your tenacity and whimsy helped create one of the most special companies of all time — one that has employed more than 175,000 people, generated over $77B in revenue, and has informed, connected, and entertained a large portion of humanity.”
Mayer's near-5-year tenure as Yahoo CEO was marked by criticism as she tried and failed to improve the company's ailing prospects through a series of acquisitions, strategic changes and layoffs.
In one of her first appearances following her resignation, this morning Mayer told the accelerateHER forum conference audience in London, "I look forward to using Gmail again."
Armstrong Takes Over
Oath will fall under Verizon’s Media and Telematics organization.
According to a statement from Verizon, CEO Armstrong has lead the integration planning since the Yahoo transaction was announced in July 2016. In a statement, Armstrong said:
"We’re building the future of brands using powerful technology, trusted content and differentiated data. We have dominating consumer brands in news, sports, finance, tech, and entertainment and lifestyle coupled with our market leading advertising technology platforms.
“Now that the deal is closed, we are excited to set our focus on being the best company for consumer media, and the best partner to our advertising, content and publisher partners."
The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, BUILD Studios, Yahoo Finance, Yahoo Mail and TechCrunch among other interests.
The closing of the deal, announced in July 2016, was delayed following Yahoo's disclosure of two major data breaches. As a result of the fallout, Verizon shaved $350 million off the purchase price.