It’s well-known that Verizon has been a major figure in telecommunications, but it no longer wants to be just that. Instead, “Big Red” hopes to expand to a broader audience, and has already started doing so with the Yahoo deal that cost $4.8 billion. While this may come as a shock to many, Verizon insists that acquiring Yahoo is beneficial. This is because the opportunities that Yahoo offers can be used to compete with giants like Google and Facebook. When combining these opportunities with those of AOL, which was acquired last year, Verizon can possibly build an empire in the digital industry.

Verizon logo

 

The Risks

Just like any with any other investment, there are always potential risks. The most obvious one is that the popularity of Yahoo is declining. After all, Google is synonymous with the internet, a bragging right that Yahoo briefly had in the past. Also, while some still use Yahoo mail, more new members are switching to Gmail. See the pattern? Yahoo is continually trailing in the distance as sales are only decreasing. Another viewpoint is that Big Red is already in a stable financial state, meaning there is no need to engage in another acquisition. If the Yahoo deal fails, Verizon will no longer have the reputation as an investor’s paradise in guaranteed profits.

The Big Picture of Verizon

Ultimately, Verizon’s main goal is to increase their digital footprint and expand their horizons. While the Yahoo deal has the potential to offer just that, there are always going to be risks. The world will have to wait and see whether the acquisition is the perfect deal or another business flop.

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Mona Amirseyedian

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