Verizon's second quarter earnings report helps to explain why the carrier is so eager to expand into digital media.
Fresh off its $4.83 billion takeover of Yahoo, Verizon said it lost 41,000 FiOS video subscribers in the second quarter, as a seven-week CWA and IBEW worker strike impacted Verizon's ability to perform new installations and hurt its wireline business overall.
Verizon has been under significant pressure to make some moves to deliver new sources of differentiation and revenue growth. The core wireless business, while it gives off significant cash, is maturing. Over the past eighteen months, the company has acquired Intel's OnCue platform, AOL, Millennial Media, and, now, Yahoo. Just what does Verizon get with Yahoo?
Verizon is doubling down on its bet in digital media, announcing this morning that it will spend $4.83 billion to acquire Yahoo's core online business.
Verizon is in the final stages of a $5 billion deal to walk away with Yahoo's core internet business, according to Bloomberg. The carrier is positioned to beat out AT&T and other rivals in the final round of bidding for the beleaguered company. The offer doesn't include Yahoo's patents – not as it stands, at least – and it's unclear whether other assets might be included.
Oppenheimer & Co. reportedly downgraded shares of Verizon over uncertainty about a possible acquisition of Yahoo, among other factors.
Final bids for Yahoo's core internet business are due Monday, according to The New York Times, and the board plans to make a decision on the fate of the assets "soon afterward." Verizon and AT&T are among the final bidders as well as several private equity firms and a consortium led by the founder of Quicken Loans who's backed by Warren Buffett's Berkshire Hathaway.
The FCC's net neutrality win in a Washington, D.C., federal appeals court could dampen the enthusiasm of Verizon and AT&T in their pursuit of Yahoo, according to MoffettNathanson.
Verizon and AT&T are preparing for a third round of bidding for Yahoo's online assets, Reuters reported.
AT&T appears to be giving Verizon a run for its money in the Yahoo sweepstakes.