Reports yesterday suggest that Verizon's interest in buying Yahoo's internet assets remain intact, and it will apparently be submitting a second round bid in the $3B range. That's down from the numbers people were talking about last month, before bidders got a look under the hood.
Supposedly it was sobering sales figures given in a presentation by CEO Marissa Mayer that resulted in a dramatic re-evaluation of the assets' value. That Mayer's turnaround efforts had been unable to change the company's fortunes was well known, but just how poorly things had been going wasn't fully understood.
But whatever the case, Verizon's intention would be to combine those assets with its AOL division in order to build up its position in the digital advertising marketplace. Verizon would apparently bid higher if Yahoo would cover certain severance obligations, and is not interested in the non-internet pieces of Yahoo -- i.e. the property and the patents. The key for them, however, would be their ability to meld the assets with their own and figure out just how to make real money owning such assets alongside their mobile and terrestrial networking businesses.
It's not close to being over yet though. There will apparently be a third round of bidding after this, and Verizon still has some competition. The private equity guys at TPG were expected to also submit a second round bid. I wonder what they would do with Yahoo if they were to get the chance...
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