YOU ARE AT:CarriersAT&T reportedly bids for Yahoo

AT&T reportedly bids for Yahoo

Surprise bid may be higher than Verizon’s

AT&T has made a bid for Yahoo’s Internet business, according to Bloomberg. The news comes as a surprise to Wall Street and the wireless industry, which has seen Verizon Communications as the carrier most likely to bid for the troubled Internet portal.

First-round bids for Yahoo are said to have been submitted, with Verizon not ranking among the highest bidders. One report last week said Verizon could end up bidding less than $3 billion for Yahoo’s core business. Yahoo’s market capitalization is currently more than $34 billion.

Like Verizon, AT&T could benefit from Yahoo’s digital advertising business. AT&T recently consolidated much of its growing media business into a unit called Ellation, which includes the Crunchyroll and Creativebug properties AT&T and The Chernin Group acquired through their Otter Media partnership. AT&T also announced plans to buy a company called Quickplay for multitenant IP distribution infrastructure, but so far the carrier does not have a “name brand” platform for ad sales and insertion.

AT&T and Verizon have both expanded into video content as a way to capture more revenue from the data traffic that their networks support. Advertising is a way to monetize this content, and it also gives the carriers a business that they can grow internationally, even if they do not own spectrum abroad. Verizon’s Go90 service is available on mobile networks operated by other carriers, and AT&T is developing a video-streaming service through its DirecTV unit that is also expected to be available on other networks.

AT&T and Yahoo have a history

Yahoo has provided Internet portal services to AT&T customers for years, but this month the carrier said it is moving that business to a New York company called Synacor. Synacor will host mobile and web portals for AT&T, and will provide the content that customers see when they access the Internet through AT&T mobile apps. Synacor also will sell advertising and paid search against that content.

Email for AT&T Internet customers continues to be hosted by Yahoo, so the two companies remain business partners. If AT&T ends up buying Yahoo, it is unclear how the carrier’s deal with Synacor will evolve.

AT&T also owns 47% of YP Holdings, the firm that publishes the Yellow Pages directories, which is one of the companies that evaluated a bid for all or part of Yahoo. YP Holdings has now dropped out of the bidding process, according to Bloomberg.

ABOUT AUTHOR

Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.

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