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Do not ask: why Yahoo! is for sell? ask: why Verizon is acquiring Yahoo!?

According to Bloomberg, Verizon Communication Inc. has emerged as the most likely buyer of Yahoo! Inc.
The deal will may be announced in few days.

Nobody is surprised that Yahoo! is going to be acquired. It is a strong brand with quite good software products. However, for many years its Business results were not good enough.

Yhaoo!'s Search Engine was a leading product until Google dominated the market.
Since than Yahoo! replaced its top management and its strategy frequently.

It tried to acquire Google and Facebook and Microsoft tried to acquire it on 2008.

Yahoo!'s most successful investment was buying 35% of Ali Baba's stocks on 2005. 40% of its Ali Baba stocks were sold on 2012.

Other Yahoo!'s assets
Flickr - an Image hosting and Video hosting website
content services such as Yahoo! Finance
Tumblr - microblogging and social networking website
Communication services such as Mail, Messenger, Chat, Maps etc. 

Why would a Telco company acquire Yahoo!?
Verizon is the largest USA based Telco company. On 2012 I mentioned Verizon Wireless's SOA implementation as an example of successful SOA implementation.

The reason that a Telco company will buy a company, which is less related to Telco is the diminish of its traditional Business Line, i.e. Voice Phone Calls, due to Voice over IP.

The same reason explains why a decade ago there were many successful Telco SOA implementations. 
These companies need SOA Agility in order to transform their Business. For more details, read a post I wrote on 2013: IT and the Communication Industry.    

Verizon's ambitious Goal  

Verizon acquired Yahoo! in order to compete in the growing Mobile Advertising market. 
Yahoo!'s advertising software is far from competing successfully with Google's advertising. However, Mobile Advertising is not yet mature. 

Verizon will try to compete in this market with Google and Facebook.

Verizon already acquired AOL on 2015. AOL, a large mass media corporation was acquired for the same purpose. 

In addition to its software Yahoo! contribute two significant assets which may support Verizon in accomplishing its ambitious goal. These assets are 200 million users and a strong brand.

Read the original blog entry...

More Stories By Avi Rosenthal

Ari has over 30 years of experience in IT across a wide variety of technology platforms, including application development, technology selection, application and infrastructure strategies, system design, middleware and transaction management technologies and security.

Positions held include CTO for one of the largest software houses in Israel as well as the CTO position for one of the largest ministries of the Israeli government.

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