Verizon (NYSE: VZ) and AT&T (NYSE: T) are preparing for a third round of bidding for Yahoo's online assets, Reuters reported.
Yahoo could begin notifying bidders whether they've made the cut as early as today after holding a board meeting to discuss second-round bids. Verizon has been outspoken about its interest in Yahoo's assets for months, and last week reports indicated AT&T is also in pursuit.
Verizon's offer of more than $3.5 billion was topped by multiple bids in the range of $5 billion, according to recent reports. A group backed by Warren Buffett and led by Quicken Loans founder Dan Gilbert was among those submitting offers.
Some private equity firms aren't expected to be asked to submit additional bids after participating in the second round. Yahoo reportedly hopes to finalize the auction and settle on a bidder by next month.
The pursuit of Yahoo by the two largest American wireless carriers underscores their aggressive strategies of expanding beyond traditional mobile services into the much broader world of media. AT&T last year closed on its $49 billion acquisition of DirecTV, and later this year it will launch a three-tiered video service targeting users on mobile devices and other platforms. Verizon, meanwhile, spent $4.4 billion last year to acquire AOL and its media properties and continues to build out Go90, an OTT video offering focused heavily on mobile.
Yahoo's online assets are attractive to wireless carriers for a few reasons. Roughly 600 million users access its mobile websites and apps per month, and Yahoo owns Flurry, a respected app analytics firm.
And while Yahoo may not be a mobile marketing giant, it claimed a substantial 2.9 percent of U.S. mobile ad revenues in 2015, according to estimates from eMarketer. So the company's online media properties combined with its mobile marketing business are compelling for carriers looking to grow their media and advertising businesses as smartphone sales in the U.S. plateau and ARPU flattens among postpaid subscribers.
- read this Reuters report
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