Verizon CEO Confirms Interest in Yahoo Acquisition
Verizon CEO and chairman Lowell McAdam appeared on CNBC's “Mad Money” Friday, confirming rumors that he is looking into a possible acquisition of struggling web portal Yahoo. A disappointing earnings report earlier this week fueled investor pressure on Yahoo's management to consider a sale. The company also announced plans to close 5 offices and reduce overall workforce by 15 percent this year as CEO Marissa Mayer continues to try to stabilize the company before the clock runs out and a sale goes through. “Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation,” Mayer said earlier this week. The embattled executive also admitted that the company is exploring strategic alternatives, giving the best indication yet that a sale would be considered.
As for Verizon, CEO McAdam has often vaunted his company's three-tiered strategy, consisting of: having great connectivity, owning platforms to drive traffic to its network, and owning content that supports its ecosystem. Cramer asked the Verizon chief if a Yahoo acquisition would fit into that strategy, to which he responded: "We have to understand the trends. But then at the right price, I think marrying up some of their assets with AOL and the leadership would be good." Verizon acquired AOL last May for $4.4 billion, and McAdam says Verizon has been keen on keeping it separate from its existing assets. Adding Yahoo, McAdam noted, could help Verizon to repackage AOL into a new, viable product.