Verizon Buys Yahoo: What It Means for Mobile

This week has started off with some big news: after months of negotiation and planning, Verizon has made their purchase of Yahoo official. The cost? Just a shade under $5 billion in cash, though the deal itself does not include Alibaba shares, Yahoo Japan, and other components of Yahoo’s total assets. Yahoo has been a punchline for many digital marketers for a while now, but make no mistake, this is a big deal.  What does this mean for digital marketing?  Here are some of our initial thoughts:

While many questions around the Verizon acquisition of Yahoo will be answered in the coming weeks and months, we think it’s fairly obvious that Verizon is set on marrying three companies (Verizon, AOL, Yahoo) into one conglomerate with a singular, primary focus: Mobile.

Verizon is already a dominant player in the mobile arena, and in acquiring AOL and Yahoo respectively, have made a strong move to bolster their Content and Programmatic Advertising capabilities.  By merging these companies, Verizon gives itself even more scale to leverage in an ongoing effort to partner with the world’s largest brands, and can overlay ad targeting with the rich subscriber data they already own.

One of the key aspects of the new Yahoo deal involves Verizon’s new ability to tap Yahoo’s network of content on properties such as Yahoo Finance, Mail, and through previous acquisitions like Tumblr.  These properties offer relevant contextual content, and can also use ad servers to deliver ads based on a consumer’s geographical location.  AOL also adds a content layer to this unique marriage as well via their own properties like Patch, which offers hyperlocal news for small towns and communities.

Furthermore, AOL has ramped up its ad-tech business a great deal in recent years to help monetize their web properties such as AOL Marketplace.  The Verizon acquisition of Yahoo means that AOL will now be able to scale ad delivery on Yahoo properties for even greater audience reach, particularly on mobile.

To summarize, Verizon’s acquisition of Yahoo signals another major move into content distribution and digital advertising by a wireless carrier and Internet Service Provider.  By combining their foothold in mobile technology and service with an expanded reach and ability to deliver customized content to even more users, Verizon is staking an even bigger claim in the digital marketing landscape.

What are your thoughts on this merger? Post your comments below and check back for updates.

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