By Kelly Liyakasa and Zach Rodgers
Verizon emerged victorious in the bidding contest for Yahoo, snapping up the media and technology assets of the still huge if perpetually down-at-the-heels digital media giant for $4.8 billion.
The deal, officially announced Monday, dramatically extends the carrier's addressable audience, adding 600 million monthly active mobile users that will support the company's cross-device advertising ambitions.
Verizon CEO Lowell McAdam said in a statement: “The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”
And Tim Armstrong, CEO of Verizon-owned AOL and a key architect of the deal, said: "Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers.”
"Powerful competitive rival" is of course a reference to the Facebook-Google hegemony in the mobile advertising arena, an area where ad spend is expected to dramatically grow in the coming years.
By buying Yahoo, Armstrong and Verizon are extending their bet that advertisers and publishers are uncomfortable enough with the concentration of power in two companies' hands that there is an opportunity for a third player to carve out a sizable share of the market.
In announcing the deal, the companies called out Yahoo's ad platforms – in particular the video exchange BrightRoll, mobile analytics platform Flurry and Gemini for native. These will be added to AOL's own ad tech stack. The companies have a job ahead integrating the technologies and deciding which brands to keep.
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