Verizon completed its massive purchase of Yahoo earlier this week. The $4.5 billion deal will likely see Verizon usher in a new era in the technology company’s history. A revamped organizational structure is reportedly only the beginning of the widespread changes set to occur at Yahoo.
The purchase, which was finalized on Tuesday, has already made an impact on the internet pioneer. As Verizon looks to streamline the company’s process, layoffs are inevitable. Yahoo CEO Marissa Mayer will not be joining the new team. Instead, she ends her five-year run at Yahoo with a compensation package reportedly worth more than $120 million.
One individual stepping up in Mayer’s place will be Tim Armstrong. Armstrong has been in charge of AOL ever since they were purchased by Verizon in 2015. His new duties will include producing news, sports stories, and other content across Yahoo’s various platforms. Armstrong is also expected to launch Oath, a subordinate of Yahoo.
The addition of Armstrong and subtraction of Mayer aren’t the only major changes likely to be implemented in the near future. Verizon is expected to reduce the size of their new content team by 15 percent. That figure, equivalent to over 2,000 staff members will be downsized in an effort to eliminate overlying tasks and assignments. HuffPost, a site operated by AOL, recently fired 39 union members. This may serve as writing on the wall for Yahoo’s staff as the new owners evaluate their employees.
Verizon’s primary focus will be the creation of revenue. Yahoo’s ad revenue has steadily declined for nearly a decade. Last year, the company pulled in under $4 billion in ad revenue, while Google recorded a $73 billion profit. Verizon hopes Armstrong and company can attract more traffic to Yahoo’s digital platforms to generate more advertising earnings in the future.
Despite the falling revenue, Yahoo’s stock has continued to rise. The stock has more than tripled since 2012 thanks to the organization’s purchase of Tumblr, and continued stake in the e-commerce business Alibaba Group. Mayer played a vital role in the company’s stock performance, which led to her generous compensation package.
Yahoo was launched in Sunnyvale, California in 1994. Beginning as a search engine, Yahoo went on to become one of the world’s most prominent sites. Even though the portal has lost traffic thanks to Google’s massive presence in the 21st century, it has remained profitable and popular. The company ranked as the sixth most visited webpage last year. Verizon aims to be more of a competitive threat to Google moving forward.