By now you might have heard or seen the news about the acquisition of Yahoo! by Verizon. After hearing some buzz in the tech community, the story finally broke and it made waves not because it was a good thing for Yahoo! but rather many were disappointed with the cost of acquisition.

Yahoo Acquisition Cost

Just a little backgrounder, Yahoo! was once valued at $120 Billion. Unfortunately, Yahoo! was not able to cope up with its competitors and through the years Yahoo! was reported to have been losing money rather than profiting. Except of course Yahoo’s stake with Alibaba and Yahoo Japan, more of that later. After the dust clears on the acquisition process it was Verizon who acquired Yahoo for $4.83 Billion, which is far from its once glorious valuation of $120 Billion.

What Are Not Included in the Yahoo Deal?

To understand further the acquisition and maybe to clarify if not to justify the acquisition cost, we need to know which parts of Yahoo! were excluded from the deal?

1. The Yahoo Japan stake – Yahoo! has a 34% stake at Yahoo Japan and it is currently valued at $8.3 Billion.
2. The Yahoo Patent Portfolio – Yahoo’s patent portfolio is valued at $1 Billion.
3. The Alibaba Stake – as you recall Yahoo managed to get a 15% stake at Alibaba and because of the meteoric rise of the latter, the Yahoo stake is now at $31.2 Billion.

What are included in the Deal?

1. Yahoo Search – one of the core products of Yahoo is their search, and as part of the deal Verizon will acquire this core product.
2. Advertising – the advertising platform for Yahoo is also part of the deal and this revenue generating platform will now become part of Verizon.
3. Content – as you may recall Yahoo! pioneered in creating content for the web and these content component will also become part of Verizon.
4. Mobile – the efforts of Yahoo on mobile will also help power Verizons already competitive mobile capability.

What’s Next For Yahoo?

So what’s the next step for Yahoo? A transition process will of course happen and it is expected that transaction will be completed on the first quarter of 2017. As announced, Yahoo will be merged with AOL, the latter was acquired by Verizon for $4.4 Billion last year. Apparently the merger of AOL and Yahoo will form a bigger media and advertising subsidiary. Something worth watching out for.

In Conclusion

It is not yet clear right now on how the merger of Yahoo and AOL will go about, we might see a new company emerge from this fusion. Or maybe we might see a familiar name to be retained. As of now we have to wait, but one thing is for sure, Yahoo’s era has ended but with this end comes a new beginning.