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Verizon has AOL chief Tim Armstrong looking into a Yahoo acquisition

Verizon has AOL chief Tim Armstrong looking into a Yahoo acquisition


Verizon wants its own slice of the internet

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Verizon appears closer to scooping up Yahoo, a move that would place an even larger slice of the internet under the internet provider's umbrella. Tim Armstrong, CEO of Verizon subsidiary AOL, is now in charge of a potential acquisition of the old tech giant's assets, according to a report from Bloomberg today. There haven't been any discussions between the two companies, and Verizon hasn't yet involved bankers to help craft an offer, the report adds. Yet the involvement of Armstrong, who was instrumental in AOL's acquisitions of The Huffington Post and TechCrunch, indicates a more serious effort to buy Yahoo may be underway.

The move would mirror Verizon's $4.4 billion acquisition of AOL last year, and it's part of a larger effort from the carrier to own more of the content it delivers to more than 112 million phone subscribers in the US — and advertises against in the process. Yahoo brings in more than 1 billion visitors to its homepage, video sites, sports and finance portals, and email service. That traffic, together with Yahoo's Brightroll ad platform, gives Verizon a enormous pool of content it has direct control over and can monetize with mobile video ads, a territory dominated by YouTube and Facebook at the moment.

Verizon purchased AOL for $4.4 billion, and now it may scoop up Yahoo

A Yahoo acquisition also gives Verizon a way to promote more of its own content over competitors', as it did recently by exempting its mobile video app Go90 from its customers' data caps. The FCC is looking into whether zero-rating violates net neutrality principles, but telecom companies like Verizon and T-Mobile are aggressively exploiting the loophole anyway.

Verizon executives have hinted at a Yahoo acquisition in the past. Back in December, Verizon CFO Fran Shammo said a Yahoo deal could go through if it "makes sense for our shareholders and we can return value." Shammo added, however, that it was far too premature to publicly discuss a Yahoo deal. Armstrong is a likely candidate to lead the offer, having helped spearhead the $250 million acquisition of ad tech company Millennial Media in October and having worked alongside Yahoo CEO Marissa Mayer in the early days of Google. Yahoo is currently spinning off its core internet business as a way to better position its valuable stake in e-commerce site Alibaba, meaning Yahoo can entertain offers from Verizon and others.