Verizon appears well positioned to acquire Yahoo's online assets as the deadline nears for preliminary bids. And as expected, AT&T and Google parent Alphabet reportedly aren't in the running.
The Wall Street Journal reported that the nation's largest mobile network operator was one of "a handful" of companies submitting an offer to acquire at least some of Yahoo's core Internet business, although more than three dozen potential suitors had previously expressed interest. The news follows a Reuters report late last week that Verizon is the "clear favorite" to walk away with Yahoo's online business.
Verizon acquired AOL last year for $4.4 billion in a deal that included properties such as Engadget, The Huffington Post and TechCrunch. It's unclear how successfully Verizon has monetized its media business, but the leadership of AOL CEO Tim Armstrong has encouraged the operator to expand its online content and services business.
Verizon executives have spoken publicly about their interest in Yahoo, and the operator is said to be working with at least three financial advisors on the effort, signaling its seriousness.
Others said to be considering bidding include Britain's Daily Mail & General Trust as well as private-equity firms Bain Capital, TPG and Advent International.
Yahoo's core business could reportedly fetch as much as $8 billion at auction. Verizon's market cap is roughly $210 billion, and the carrier has $5.07 billion in total cash on its balance sheet.
While Yahoo has struggled mightily to monetize its web properties, they appear to be a good fit for Verizon, which has its sights set on ramping up ad revenues. The carrier's subscriber base provides a massive distribution channel that could be leveraged almost immediately, and Verizon could integrate Yahoo's properties with its Go90 video offering.
How effectively Verizon could capitalize on any acquisition is far from clear, however. U.S. mobile carriers have consistently failed to monetize apps and content effectively in the smartphone era, providing opportunities for Apple and Google to build mobile empires based on their app ecosystems.
For more:
- see this Wall Street Journal report
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