One asset that Verizon will be getting as part of its $4.83 billion acquisition of Yahoo’s core assets, which it did not specifically mention in its big announcement today, is Yahoo’s (in)famous brand — main name, purple color and exclamation mark all included. This, in turn, means that when the deal is completed (expected Q1 2017) the remaining Yahoo will rename itself and will become a separate, registered publicly traded investment business, the company said today.
It’s not clear if Verizon and AOL (which owns us, TechCrunch) intend to keep the Yahoo! branding that they are acquiring. Generally, they’ve held on to brands when ingesting them, and like it or hate it, Yahoo’s brand is huge. Indeed, later today, AOL CEO Tim Armstrong noted, “Don’t touch the brands.”
As of today, the business that will stay behind post-acquisition by Verizon includes Yahoo’s cash, its shares in Alibaba and Yahoo Japan, Yahoo’s convertible notes, certain minority investments, and Yahoo’s non-core patents (called the Excalibur portfolio).
IP that is connected specifically to Yahoo’s core assets will be part of the Verizon acquisition, and Yahoo is still looking for a separate deal for the patents that are in the Excalibur portfolio. That portfolio is estimated at upwards of $1 billion by Yahoo.
There are around 4,000 patents, both issued and applications for pending patents, as part of Excalibur, Yahoo said today, but the implication was that they were not getting the kinds of offers that it had hoped to get. “We didn’t want this to be an afterthought to the rest of the assets,” chair of the strategic review committee, Tom McInerney, said in a conference call today. It also sounds like there is an option either to continue trying to sell them, or perhaps license them directly, which is already the case with some of these patents, McInerney said today.
The shares in Alibaba and Yahoo Japan, meanwhile, respectively are valued at $31.2 billion and $8.3 billion. The company today reiterated that it cancelled its decision to sell off those stakes as originally planned because of the tax burden for doing so. Today, during Yahoo’s investor call, it also raised the possibility that someone else could buy those stakes after the sale to Verizon, although for now it seems the strategy is more just to get the assets separated without any hitches.
As for cash, Yahoo says it “intends to return substantially all of its net cash to shareholders and will determine and communicate a specific capital return strategy at an appropriate time.”
Marissa Mayer — the much-watched CEO who was hired to turn around Yahoo but ultimately did not succeed despite years of acquisitions and many big plans — also confirmed directly that she will stay on for the next stage, whatever that may be. But no info on what comes after that is completed.
“For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter,” she notes in her memo to Yahoos.
And in the conference call today, in response to an investor question about the topic, she again did not reveal any long term plan for her own role, as she noted that she will both help with the transition, as well as staying on to help settle the remaining assets of the company.
It’s notable that in Verizon’s news release it does not indicate any specific title or role for her as part of the sale, although AOL CEO Tim Armstrong mentions her helping with the transition to Verizon in his own memo.
Updated with notes from Yahoo’s investor call.