Verizon to bid $3 billion for Yahoo’s core business, report says
Yahoo Inc. shares are down slightly after a report that Verizon Communications Inc. is expected to bid $3 billion for the embattled tech company’s core Internet business.
Yahoo’s stock was down 19 cents, or 0.5%, to $36.88 around 11:30 a.m. Eastern time.
According to the Wall Street Journal, Verizon had planned to submit the second-round bid Monday. The Journal also reported that Yahoo is expected to hold at least one more round of bidding and that offers could change in the final round.
Verizon has been seen as the front-runner to buy Yahoo as the New York-based telecommunications giant continues to bulk up in the media sector. Last year, Verizon acquired AOL Inc., and analysts have said that buying the Sunnyvale, Calif.-based Yahoo could give Verizon more scale on the Internet.
Adding Yahoo could help Verizon push further into the digital advertising business by combining Yahoo’s ad team with AOL’s. Analysts also have wondered whether Verizon might also be able to leverage Yahoo’s live-streaming video coverage to increase its wireless customers’ data usage.
In May, a Journal article said Verizon and other bidders were expected to offer between $2 billion and $3 billion for Yahoo’s core business, which includes publishing properties such as Yahoo Mail, Yahoo Finance and Yahoo News.
That figure was much lower than expectations from as recently as April that bids would come in between $4 billion and $8 billion.
Laura Martin, Internet analyst for Needham & Co., said Verizon’s bid shows caution.
She also said it’s not clear exactly what assets would be included in the deal, so it’s difficult to gauge how low the bid might be. Verizon has indicated a lack of interest in buying Yahoo’s patents and real estate, the Journal reported, citing an unnamed source.
“There may be higher bidders,” Martin said. “There’s still a lot of stuff we don’t know.”
Representatives from Verizon and Yahoo declined to comment.
8:32 a.m.: This article was updated to include comments from analyst Laura Martin, responses from Verizon and Yahoo and additional background information, as well as Yahoo’s current stock price.
This article was originally published at 7:34 a.m.