5 things to know today …
1. Verizon Communications is set to make a bid for Yahoo next week, according to Bloomberg. It’s been two months since Verizon CEO Lowell McAdam told CNBC’s Jim Cramer he thought “marrying up” Yahoo’s assets with Verizon’s AOL could make sense for investors. McAdam said at the time the price would have to be right.
One piece of Yahoo that may have given Verizon pause is the company’s 35.5% stake in Yahoo Japan, but now it looks as if Verizon may be ready to buy that business as well in order to get the U.S. assets. SoftBank owns just over 36% of Yahoo Japan, and is said to be interested in buying more so the Japanese carrier could come in as a rival if Verizon makes a bid. SoftBank is already a competitor to Verizon Wireless through its majority ownership of Sprint.
Google, Time, and private equity funds funds Bain and TPG are also said to be evaluating bids for Yahoo. The amount any of these companies may bid for Yahoo is an open question. In recent weeks, the stock market has valued Yahoo at less than the sum of its parts, which include a stake in China’s Alibaba as well as the Yahoo Japan stake.
For Verizon, a Yahoo purchase would represent a continuation of the company’s recent acquisitive trend. Its biggest media acquisition was of course AOL, and through AOL it purchased Millenial Media for $238 million last fall. Before the AOL acquisition, Verizon bought content delivery network EdgeCast Networks, live video encoder UpLynk, and Internet video specialist Intel Media. Just this week, Verizon said it will buy a stake in AwesomenessTV, a production company partially owned by DreamWorks Animation.
“We believe ad-supported video service remains a top strategic focus for Verizon (if not the top focus),” said Wells Fargo analyst Jennifer Fritzsche, commenting on the AwesomenessTV acquisition. “We continue to expect Verizon to do tuck-in acquisitions and investments to further strengthen this initiative led by Marni Walden.”
Yahoo would probably be more than a “tuck-in acquisition,” but it would bolster Verizon’s media holdings. Yahoo Finance and Yahoo Sports are both popular sites, and combining these properties with AOL would give Verizon’s advertising business more bargaining power.
2. AT&T Mobility is matching Verizon Wireless’ $20 upgrade fee. Verizon Wireless added the fee on Monday, and AT&T Mobility quietly matched it later in the week. AT&T Mobility already had a $15 upgrade fee in place, so this represents a minor adjustment. Sprint also charges an upgrade fee, but so far T-Mobile US does not.
3. Analysts expect Samsung to sell up to 9 million Galaxy S7 smartphones within one month. Nineteen analysts have raised their revenue estimates for the company within the past four weeks. The new phone’s success couldn’t come at a better time for Samsung, which has been squeezed by competition from Chinese vendors at the lower end of the market and by Apple at the high end.
4. FBI director James Comey said his agency bought a tool from a trusted source to unlock the iPhone that belonged to one of the San Bernardino, California, shooters. By turning to a third party for help, the FBI ended a highly publicized standoff with Apple. Although Apple has helped the government access iPhones in the past, this time the FBI asked for software that would enable government agents to bypass iOS security features.
Comey said the tool the FBI used to unlock the iPhone would not work on newer iPhones, including the iPhone 5s and the iPhone 6 models.
5. Reddit users are celebrating the launch of the company’s mobile apps. The Reddit apps for iOS and Android will make the popular news service easier to access on mobile devices. Reddit’s content is created and curated by its users, with the most popular posts rising to the top.
Follow me on Twitter.
