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Yahoo CEO Marissa Mayer (GeekWire File Photo)
Yahoo CEO Marissa Mayer (GeekWire File Photo)

Verizon will buy Yahoo’s operating business for $4.83 billion and integrate the venerable internet company with another, AOL, under an acquisition confirmed by the telecom giant this morning.

“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers,” said Lowell McAdam, Verizon’s CEO and chairman, in a statement. “The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”

Verizon CEO Lowell McAdam
Verizon CEO Lowell McAdam

The deal follows a lengthy struggle by Marissa Mayer, the Yahoo CEO, to find a path forward for the Sunnyvale, Calif.-based company. Noting that Yahoo was once valued as much as $125 billion, Forbes calls this morning’s announcement “the saddest $5 billion deal in tech history.”

The companies, of course, see it differently. “Yahoo and AOL popularized the Internet, email, search and real-time media,” Mayer said in a statement. “It’s poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile.”

Mayer tells Yahoo employees in an email, “For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter.”

AOL CEO Tim Armstrong tells employees, “Together AOL and Yahoo, mobilized by the power of Verizon, will instantly create an entity reaching over 1B people with an unrivaled roster of the world’s most powerful brands. We are charting the course to our 2020 goals of reaching 2 billion consumers and today’s deal is a major and important milestone in that journey.”

The all-cash deal does not include Yahoo’s stake in Alibaba Group or other Asian investments. The company says it will continue to hold those assets and operate as a publicly traded investment company, under a different name, after the all-cash acquisition by Verizon closes. That’s expected to happen in the first quarter of 2017, according to a Verizon news release.

The deal also has implications for Microsoft, which partners with both AOL and Yahoo through its search and search advertising businesses. We’ve contacted the Redmond company for comment.

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