Yahoo, one of the biggest Internet services companies of yesteryears, has been acquired by US telecom major Verizon for $4.83 billion in an all-cash deal.
While the acquisition is being seen by many analysts as the end of the road for the Internet pioneer, users and fans are hoping for a magical revival of its glorious past.
Created by Stanford graduates Jerry Yang and David Filo, Yahoo was originally a directory of websites. Then it quickly got into search, email, shopping and news before losing its way to the likes of Google and Facebook.
In India, the deal could signal the entry of Verizon in a bigger way. Verizon currently offers communication services to large MNCs. With Yahoo, the telecom major will get a larger play in the retail consumer space. If that happens, Yahoo would probably re-start its development centre in India. “As Verizon doesn’t have a consumer brand in India, the Indian digital market and customers may not be a high priority initially. But in the medium term Verizon will not be able to ignore a growing market such as India,” said Pareekh Jain, Research VP, Engineering Services, HfS Research.
While India-specific numbers are not available, analysts reckon that a significant percentage of both Yahoo’s one billion monthly active users and 225 million Yahoo Mail users are from India.
But when it comes to digital ad revenue, Verizon, after combining Yahoo with AOL will still come up distant third after Google and Facebook.
“Yahoo has been very weak in India and so are Verizon and AOL. So, the revenue impact of the acquisition will be negligible,” said Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research.
Time will tell whether the acquisition pays off. As Yahoo India CEO Gurmit Singh once told BusinessLine: “…the journey is like a marathon … with small sprints.”
With inputs from Varun Aggarwal