Verizon set to buy out Yahoo for $6.4b

Monday, 25 Jul 2016 12:43:56 | Justine Parker

Former Google Vice President and now Yahoo! CEO Marissa Mayer (Getty Images/AFP: Justin Sullivan)

Struggling internet search engine Yahoo is set to be taken over by US telecommunications giant Verizon in a deal worth more than $6 billion.

Verizon will announce the buyout before the US share market opens for trade tonight, Bloomberg is reporting.

The deal would see Verizon pay $US4.8 billion ($6.4 billion) for Yahoo's core business, excluding its successful Asian ventures - a 15 per cent stake in the Chinese online marketplace Alibaba and its 35 per cent holding in Yahoo Japan - as well as some patents.

The value of those remaining assets is estimated at around $US40 billion ($55 billion).

Verizon is expected to combine the business with the internet firm AOL, which it bought last year for $US4.4 billion ($5.9 billion).

The company has been on the market since February.

Yahoo was an early internet pioneer when it was founded by Jerry Yang and David Filo as an online directory and web portal 22 years ago, but it has struggled to keep up with younger and more nimble rivals such as Google and Facebook, and the advent of social media.

The deal is expected bring an end to Marissa Mayer's four-year tenure at the helm of Yahoo.

Ms Mayer was brought in from Google in July 2012 to turn Yahoo around after several years of turmoil in which it burned through five chief executives in as many years.

The company has been the subject of speculation about its future as far back as 2008, when Microsoft made an unsolicited bid to buy the firm for around $US44.6 billion ($60 billion), which was rejected at the time for undervaluing the company.

Yahoo shares closed 1.4 per cent higher on Friday at $US39.38.

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Verizon set to buy out Yahoo for $6.4b

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