updated - August 5, 2020 Wednesday EDT
Investors Insist Yahoo Merge with AOL
Unsatisfied with Chief Executive Marissa Mayer's turnaround plans, two of Yahoo's largest shareholders grew tired of the waiting and went directly to AOL asking for a merger.
Reuters reported that two of Yahoo's Top ten shareholders went to AOL Chief Executive Tim Armstrong themselves asking for a merger, noting that as much as $1.5 billion could be saved by both companies if they merge together.
Armstrong acknowledged the benefits with of the merger but would only accept the offer it was "friendly" enough, which, according to Bloomberg, is a highly unlikely scenario.
Mayer's efforts led to a significant increase in Yahoo's stock the past months, although most investors say that the growth is due to its team-up with Chinese e-commerce giant Alibaba who put out the largest IPO in online history.
Aside from that, she put out an aggressive acquisition strategy. Yahoo's business moves in the past two and a half years left its shareholders unsatisfied, buying out blogging site Tumblr-which did not benefit the company as much as they expected.
Back in September, Starboard suggested a merger between Internet veterans Yahoo and AOL, investors are wondering whether the team-up would work.
Would it be a disaster of putting two antique online companies that are struggling to adapt by their own selves, or the making of one of the best team-up in the Internet?
Recently, Yahoo's major shareholder, Starboard Value sent a letter to Yahoo's CEO Marissa Mayer on Fri. pushing the Internet giant to make actions to make its shareholders get the bang for their buck and also to team-up with old-time online company AOL.
Partnering with AOL would be a double-edged sword-Yahoo could make use of AOL's advertising technology to penetrate the online ad market where Google and Facebook are leading the race.
Google gets one-third of the world's $140 billion ad spending this year while Facebook takes 8 percent.
Meanwhile, Yahoo and AOL only share 2.5 percent and 1 percent, respectively.
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