As Yahoo's growth prospects continue to stay flat and analysts predict the company may be broken up and sold off, Verizon (NYSE: VZ) Chairman and CEO Lowell McAdam confirmed that the service provider is taking a hard look at buying the Internet search and online video company -- or at least some of its assets.
"We said on this show a month or so ago in December we would look at it. I think their board is being very responsible in how they're doing this, very deliberately, very logically," McAdam said in an interview with Jim Cramer on CNBC's Mad Money. "We have to understand the trends that we're seeing in some of their results now, but then at the right price I think that marrying up some of their assets with AOL under Tim Armstrong's leadership would be a good thing."
Yahoo has struggled for several months to show real growth and progress, including focusing on its "Mavens" initiative (a combination of mobile, video, native advertising, and social media strategies) from 2014 onward. While that has shown promise, Yahoo has vacillated on other elements of its media strategy -- investing millions in Yahoo Screen, for example, on licensed and original content, only to shut down the online video hub in January.
The company said on its fourth-quarter earnings call that it will slash its workforce by 15 percent and explore "strategic alternatives," a move The Wall Street Journal said is effectively hanging a "for sale sign on its Web properties" and ending its two-decade run.
Verizon could be a logical buyer for Yahoo's video and advertising assets. McAdam told Cramer that the company so far has kept AOL separate from the core company, putting it into a sort of "incubator" and analyzing results after feeding mobile subscriber information into AOL's advertising platform ONE.
"We've only had it for 6 months, I don't want to declare victory, we've got a long way to go, but putting more pieces into it like Millennial Media, perhaps some things from Yahoo might make sense, I think we can turn that into something special," McAdam said.
For more:
- see this CNBC article
- see this WSJ article
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