Verizon Sends AOL CEO for Informal Talks with Yahoo

Tim Armstrong, CEO of AOL
Tim Armstrong, CEO of AOL

US mobile network Verizon Communications is exploring a possible bid for at least some of Yahoo, having sent Tim Armstrong, CEO of the companys AOL unit, to hold informal talks with the Yahoo leadership.

According to Bloomberg, who cited a person with knowledge of the situation, no offer has been made and there have been no formal talks so far, but with Yahoo known to be considering the sale of some or all of its core business, Verizon are hoping that it can stake an early claim.

Lowell McAdam, CEO of Verizon, went so far as to express interest in buying Yahoo publicly last week, during an appearance on CNBCs Mad Money. By sending Tim Armstrong to steer talks, Verizon is clearly betting on the relationship between him and Marissa Mayer, CEO of Yahoo. The two were both executives at Google before leaving to head their respective companies, and had reportedly considered combining AOL and Yahoo in the past.

Verizon acquired AOL for $4.4bn (£3bn) in May 2015, and the acquisition of another giant web publisher and portal provider would strengthen the companys moves into the advertising world. As well as Yahoos proprietary ad tech, the deal could potentially net Verizon the more than 1bn people who make sure of Yahoos email, finance, sports and video sites.

Put together with AOLs 2m users and Verizons 112m-plus mobile subscribers, it would provide the company with a huge audience for its go90 streaming service, which the firm is investing in heavily with the hope of turning it into a new source of revenue and sales.

Verizon recently drew criticism for skirting US net neutrality laws to zero-rate its go90 service for US mobile customers. If it can maintain offering the video streaming platform as a data-neutral service and gain access to Yahoos customers, it could potentially challenge YouTube and Facebook in terms of mobile video advertising.