ECU economic professors react to Verizon buying Yahoo for $4.83B

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The number one wireless carrier in the country will be making another purchase.

Verizon Communications is set to buy Yahoo's internet properties as they try to compete with online powerhouses like Google.

Verizon announced Monday that they would buy Yahoo for $4.83 billion. This is their latest push to become a wireless internet player since their purchase of AOL last year.

Many remember Yahoo dominating the internet game over a decade ago, but matters have changed. An analyst at Forrester Research says Yahoo failed to define what it is and what value it provides.

Nick Rupp, an economics professor at East Carolina University, believes the purchase by Verizon of its internet properties is a solid attempt to create more internet traffic.

"Right now, Facebook and Google dominate the advertising the dollars, so they would combined be the third largest in advertising on the internet, so they are trying to get more sites that people visit," Rupp says.

Verizon's $4.83 billion bid trumped other suitors like AT&T. According to a study conducted by the U.S. Census Bureau, as many as 1 in 5 households are now mobile-only, compared with 1 in 10 in 2013. That may be why Verizon took such an interest.

Philip Rothman, another economics professor at ECU, says this is a cheap price compared to what once was. At it's peak, Yahoo was valued at $125 billion.

"Verizon is trying to expand it's web business," he says. "It has a great deal of information from the habits of it's many many customers and it would like to leverage that."

Rothman says Verizon has a bit of a catching up to do, but the power is in their court to produce something that entices people to visit their site.

Right now, Yahoo ranks 7th in terms of digital ad sales worldwide.

The Verizon and Yahoo deal is expected to close in the first quarter of 2017.



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Verizon is buying Yahoo for $4.83 billion, marking the end of an era for a company that once defined the internet.

The sale announced Monday marks the second time in two years that Verizon has snapped up the remains of a fallen internet star as it broadens its digital reach. The nation's largest wireless carrier paid $4.4 billion for AOL last year.

Verizon won the Yahoo bidding after a five-month auction.

Yahoo Inc. is parting with its email service and websites devoted to news, finance and sports in addition to its advertising tools under pressure from shareholders fed up with a steep downturn in the company's revenue during the past eight years.

The deal is expected to close in 2017's first quarter.