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How Verizon's billion-dollar Yahoo deal could impact consumers

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Once valued at $125 billion, Yahoo's core web assets have been officially been sold off to Verizon for a much smaller sum of $4.8 billion.

The deal will unite Yahoo with longtime rival AOL within the Verizon fold. Verizon acquired AOL last year for $4.4 billion.

Through the deal, Verizon also gets Tumblr, Flickr and BrightRoll, which will help boost its standing among the digital media landscape. (Verizon's looking at you, Google and Facebook.)

Verizon also gains Yahoo's 600 million users.

What the deal doesn't include is Yahoo's cash, or its shares in Alibaba or Yahoo Japan.

How will this impact consumers?

To start, consumers will see a greater combined push into mobile, specifically mobile video, by Verizon and Yahoo. They will also see increased emphasis on content creation, particularly digital video.

"We're building something that we want to turn into a very large business. Getting audience and getting scale is critical," Verizon EVP of Product Innovation and New Businesses Marni Walden told Fast Company.


The fresh customer data Verizon gets from Yahoo could also help advertisers. Per eMarketer, Yahoo is expected to bring in $2.83 billion in digital ad revenue this year.

Executives have said the goal is to build out the company's mobile advertising business to compete with media giants like Facebook and Google. With Yahoo, Verizon has the capacity to do just that.

"When you look at Yahoo's website and services, they are a bit underwhelming," Recon Analytics Founder Roger Entner told Circa. With Verizon's help, consumers should see "improved platforms and better ads."

For the top U.S. wireless provider, Yahoo's data and ad tech could bring new revenue sources.


With an eye on audience growth, a package including Verizon's Go90 streaming and Yahoo's Finance and Sports properties could be way for Verizon attract users.

Separately, Entner says if Verizon could leverage its NFL sponsorship to boost Yahoo's Fantasy Football experience, it could win over new fans -- and fresh advertisers.

Beyond Sports and Finance, blog platform Tumblr is likely to get more attention as well. It's worth noting the site has 400 million monthly users made up of mostly millennials -- precisely the audience Verizon seeks to engage.


As it pushes to distinguish itself, Verizon would benefit from improving Yahoo's search functionality and its services for wireless users. Forbes has suggested one way to boost Yahoo's value to users is through exclusive content and price offerings.

Pre-net neutrality, Verizon would have been able to, for instance, make all Yahoo content free with no objections. Something like that is unlikely, Entner says, adding the FCC will be watching Verizon closely on how it treats any given company or service.

Overall, the biggest change consumers are likely to see from the deal is an emphasis on targeted ads across all properties.

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