The deal includes Yahoo real estate assets, while some intellectual property is to be sold separately, the person said. Yahoo will be left with its stakes in Alibaba Group Holding Ltd. and Yahoo Japan Corp., with a combined market value of about $40 billion.
A transaction would end Yahoo’s months-long exploration into strategic alternatives amid pressure from activist investor Starboard Value LP. It will add the web company and its millions of daily users to Verizon’s growing stable of media properties and is also likely to bring to an end the reign of Yahoo Chief Executive Officer Marissa Mayer, who tried and failed to re-invent Yahoo as an independent company.
Yahoo hasn’t said what it will do with its investments in Alibaba and Yahoo Japan.
AT&T Inc. and Quicken Loans Inc. founder Dan Gilbert, as well as firms Vector Capital Management and TPG, were also active in bidding for Yahoo.
The deal, which has been shepherded by Verizon’s EVP of Product Innovation and New Businesses Marni Walden and AOL head Tim Armstrong, will be a big leap for the company, which has been seeking to add to its ad tech and digital content offerings. Verizon bought AOL a year ago for $4.4 billion to start that process.
Verizon will also be getting a mass of media assets, some of which are still powerful, such as Yahoo Finance and Yahoo Sports, and others not so much. Under CEO Marissa Mayer, Yahoo spent large sums on content — such as its $1 billion acquisition of Tumblr and a deal to bring TV news star Katie Couric to the network — that have not paid off.
The acquisition by Verizon, the largest telecommunications company in the US, also marks the final chapter to the tumultuous story of one of the Internet industry's pioneering companies. Yahoo was founded in 1994 as one of the first directories to help people navigate the emerging selection of websites.