After what seemed like an eternity of quiet while negotiations were being held, the subject of former internet giant yahoo being acquired by Verizon returned to the fore on Thursday, as the two sides come ever so closer to closing the deal and owning the other half of the two pillars of the 1990s worldwide web. Following a period of deliberation, revisions have been agreed on regarding the buyout of Yahoo’s core net assets, which will then be merged with Verizon’s already acquired AOL to form a new digital subsidiary for the wireless telecom company.
But this conclusion will also mean an appalling thousand-employee layoff.
‘Merge and purge’
Reportedly, on June 8 during a special shareholders meeting, Yahoo shareholders voted in approval of a revised agreement with Verizon to divide the failing online firm into its central internet assets and outliers. The former is what Verizon will be acquiring while the latter, formed out of Yahoo’s stakes in Yahoo! Japan and Alibaba from China, will be reorganized into the holding company Altaba Inc. That will not be the end of it, however, as the internet portion of Yahoo will then be merged with previous Verizon acquisition AOL to form the digital company Oath under their umbrella.
The downside of these company reorganizations, however, is an expected mass layoff, as Verizon proceeds to cut down extraneous personnel from the combined Yahoo-AOL merger.
Oath is expected to lose about 15% of their starting people, or roughly 2,100 employees, according to an inside source.
With regards to the upcoming merge and purge, an AOL spokesman said in an interview that the strategy for the soon to be created Verizon subsidiary Oath is to lead the global brand space. "Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy," he explained.
Last legs
It’s been almost a year since the first word came out of Verizon’s intention to acquire Yahoo, once the most visited website on the internet until the so-called “bursting” of the dot-com bubble, which crippled it and AOL to near-irrelevancy. Speculation has been rampant as to whether the wireless telecommunications giant will go through with it, but those doubts seem to have been put to rest.
The buyout price was actually cut by Verizon to just $350 million following the devastating hacker attack on Yahoo. Once its internet assets have been merged into Oath, AOL CEO Tim Armstrong will be in charge of the whole thing while Yahoo CEO Marissa Meyer will step down. The deal will be over and done with by next week.
