Yahoo Played Well in Its Last Game as an Independent Entity

The chronic problem of declining revenue was what led Yahoo to sell its business to Verizon Communications. The results that were posted on Tuesday after the market hours saw a 22.1 percent increase in quarterly revenue smashing all market expectations.

Yesterday’s results were the final quarterly report as the 21-year-old publicly traded company is now going to be acquired by Verizon. The $4.5 billion sale of Yahoo to Verizon is expected to be sealed in June before the commencement of the second quarter.

Marissa Mayer, Yahoo’s CEO for nearly five years said in a statement, “As we enter our final quarter as an independent company, we are committed to finishing strong and planning for the best possible integration with Verizon. With the transaction anticipated to complete in June, I’ve never been more proud of the improvements we’ve made to the business and the value we’ve delivered to our shareholders.”

The company posted an EPS (Earnings per share) of 18 cents per share, which are 4 cents more than Thomson Reuters’ estimate. Similarly, the revenue for the quarter stood at $1.33 billion against the estimate of $1.23 billion by Thomson Reuters.

The Yahoo-Verizon deal was marred by the two different security breaches in which the personal information of more than 1 billion Yahoo user accounts was compromised. This resulted in a $350 million markdown in the deal’s final price, which Yahoo had to give to Verizon to compensate for the damage that happened due to these breaches. Though there were rumours that Verizon might pull off from the deal after the breaches were public, Verizon decided to continue with the revised deal price.

After this takeover that is expected to take place by June end, Yahoo’s $8 billion in cash and valuable stakes that it has in Alibaba Group and Yahoo Japan, both Asian internet companies will move to Altaba, newly created company. The current CEO of the company Marissa Mayer will neither be part of this newly formed company Altaba nor is she expected to join Verizon to oversee Yahoo operations. She will, however, be entitled to a severance package of $23 million in case she doesn’t have a job.

Yahoo, which is now in its final months as a standalone company, has shown encouraging signs that it can definitely move towards growth. Prior to this quarterly result on Tuesday, the company had faltered on revenue and adjusted earnings estimates in four of the consecutive nine quarterly reports.

The good results did little to improve the share price of the company in extended trading on New York Stock Exchange.

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