One of the prime movers in the development of the internet, Yahoo is still among the world's best-known online brands. However, performance has declined steadily in recent years as the company struggled to find a role as a standalone business in a greatly altered digital world. It lost its position as the foremost player in the search and directory services segment to Google, and its range of news and entertainment services now compete with multiple, far more nimble challengers. It did not come as a great surprise in early 2008 when Microsoft issued a handsome offer to acquire the business. Showing a daring level of self-confidence, Yahoo's board steadfastly opposed the takeover. Microsoft eventually withdrew its bid. Since then, Yahoo has had trouble justifying its decision to spurn a full takeover so vehemently. Scott Thompson became CEO in 2012, but resigned after less than five months following the discovery of false claims in his CV. He was eventually replaced by former Google exec Marissa Mayer, but despite commanding an exceptionally high salary she too failed to find the magic bullet with which to turn around performance. Revenues declined steadily from a high of $7.2bn in 2008 to a low of $4.62bn in 2014. There was a modest recovery after that to almost $5.2bn for 2016. A silver lining finally materialised with an offer by Verizon to acquire the main online business for $4.8bn. That was subsequently cast into doubt by revelations of not just one but two massive data hacks in 2013 and 2014 that had previously been neither discovered nor disclosed. After some deliberation, Verizon agreed to proceed with the acquisition but at a reduced price of $4.5bn. The corporate entity's most valuable asset is not the Yahoo online business but its minority shareholding in Chinese ecommerce giant Alibaba. Following completion of the Verizon deal, this became the core of a new standalone investment company, Altaba. Yahoo now sits alongside former rival AOL in Verizon's digital media division. Yahoo Japan, originally a joint venture between the US company and Japanese partners, is now an entirely separate company controlled by Japanese investment giant Softbank. It has repositioned itself as an ecommerce company rather than a news portal. In 2019, it acquired a controlling stake in local fashion e-tailer Zozo for $3.7bn.
Capsule checked 18th January 2019
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Adbrands Account Assignments track account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets.
Adbrands Daily Update 12th Dec 2018: Verizon's gamble on digital media hasn't gone according to plan. The group said it will write off another $4.5bn in the current quarter against acquired businesses AOL and Yahoo and their various subsidiary brands. On top of previous write-offs, that move will reduce the goodwill attached to those two deals - which had a combined value of $9bn - to just $200m. The main culprit is the continuing squeeze on digital advertising. Along with every other online company except Google, Facebook and Amazon, Verizon's digital division Oath is struggling to sell space. Its share of the digital ad market is expected to fall by almost a quarter year-on-year to to 3.3%. "These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business," said the company. The Oath brand will be dropped in Jan 2019 in favour of Verizon Media Group.
Adbrands Weekly Update 5th Oct 2017: US telecoms giant Verizon has revealed that the massive data hack at Yahoo, whose acquisition it completed earlier this year, affected even more of the web pioneer's customers than previously thought. Yahoo warned last December that as many as 1bn accounts had been compromised. That was already the biggest cyber breach in history, but Verizon now says that the actual number was three times higher than that: all 3bn of Yahoo's customer accounts. Yahoo is now part of Verizon's Oath digital media division, alongside AOL and other brands.
Adbrands Weekly Update 15th Jun 2017: Finally, it's done. After a whole year of negotiation and renegotiation, Verizon completed the acquisition of the Yahoo business. The struggling internet pioneer merges with Verizon's existing AOL division to form new umbrella company Oath. In addition to AOL and Yahoo, its 20 or so brands also include HuffPost, Tumblr, Flickr, TechCrunch and Moviefone. Yahoo shareholders finally get something back after years of worry, while Yahoo CEO Marissa Mayer walks away with a reported $23m golden parachute. Oath CMO Allie Kline suggested that the enlarged division will be the P&G of media and technology. She told The Drum, "When you go to the grocery store, you don’t look for [the] P&G [brand], you look for Bounty, Head and Shoulders, Dawn… We wanted to create a brand that would be the underpinning brand the same way P&G is. It stands for a set of shared values among the employee base, but also the front-facing brand for advertisers, publishers and the media community."
Adbrands Weekly Update 6th Apr 2017: Oath. That will be the name of Verizon's digital media division when it completes its acquisition of Yahoo this summer. The new unit, to be headed by Tim Armstrong, will combine Yahoo and AOL and their 20 or so surviving subsidiary brands, like Huffington Post, Engadget, Tumblr and Flickr. As AOL CMO Allie Kline told Adweek, the new name isn't about swearwords - as non-Americans might have assumed - but about loyalty and allegiance. "When you look at the diversity of this set of brands, and you look at the one thing that connects or binds all of these assets and the people who work on them, it is a set of values we share.... It’s being deeply committed to building brands and not just aggregating content... An oath is one of the most long-term and profound commitments a human being can make. We wanted to be anchored by that, not just in the name but in the people who work on all of our brands."
Adbrands Weekly Update 16th Mar 2017: The US Justice Department has charged four men with breaking into computer systems at Yahoo in 2015 and stealing personal data for around 500m users. That attack constituted what is thought to be the world's biggest ever single data hack and, after it was discovered, almost derailed the purchase of Yahoo by Verizon. In a revelation which further raises tensions between the US and Russia, two of the men are officers of Russia's national security agency FSB. The others are criminal hackers whom they "protected, directed, facilitated and paid". According to a statement from the authorities, "The defendants targeted Yahoo accounts of Russian and US government officials, including cyber security, diplomatic and military personnel. They also targeted Russian journalists; numerous employees of other providers whose networks the conspirators sought to exploit; and employees of financial services and other commercial entities." One of the hackers also used access to Yahoo "to search for and steal financial information, such as gift card and credit card numbers, from users' email accounts." Three of the men are thought to reside in Russia. However, the fourth, one of the hackers, was arrested this week in Canada and remains in custody.
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