Original Story: nytimes.com
SAN FRANCISCO — Verizon, seeking to build an array of digital businesses that can compete for users and advertising with Google and Facebook, announced on Monday that it was buying Yahoo’s core internet business for $4.83 billion in cash.
The deal, which was reached over the weekend, unites two titans of the early internet, AOL and Yahoo, under the umbrella of one of the nation’s largest telecommunications companies. Verizon bought AOL for $4.4 billion last year. Now it will add Yahoo’s consumer services — search, news, finance, sports, video, email and the Tumblr social network — to a portfolio that includes AOL as well as popular sites like The Huffington Post.
The fate of Yahoo’s chief executive, Marissa Mayer, who came under sharp shareholder criticism for failing to arrest the company’s long downward spiral during her four-year tenure, is unclear.
In an interview, Ms. Mayer said, “I plan to stay. I love Yahoo and I want to see it into its next chapter.” But she and Tim Armstrong, the chief executive of AOL, said it had not yet been decided if she would have a role at the company after the deal closed in early 2017.
If she is terminated, she will be due severance of about $57 million. If she received that payout, her total compensation from Yahoo for her service so far would be about $218 million, according to the compensation research firm Equilar.
Verizon, which has a vast amount of information about its customers’ internet use, hopes the combination will help it create a strong No. 3 challenger to Google and Facebook for digital advertising revenue.
Mr. Armstrong said the acquisition strengthens Verizon’s offerings to advertisers and consumers and gives it much more scale, since Yahoo claims one billion users who visit at least once a month.
“This deal is a leap forward from serving millions of customers to billions,” Mr. Armstrong said in an interview. “Yahoo is one of the most powerful brands on the planet.”
Verizon plans to keep most of Yahoo’s current products, including its still popular email service, and invest in them to make them stronger. “Our strategy is to structure ourselves as a house of brands,” Mr. Armstrong said. However, he said that Verizon has not yet decided what it wants to do in search, an area where Yahoo has waged a losing fight against Google for a decade.
The Yahoo purchase carries risks for Verizon, which is well known for its wireless phone and internet services but has little experience in the cutthroat business of digital content. Analysts say that its purchase of AOL has yet to prove its value, although Mr. Armstrong is a well regarded operator.
Yahoo’s leadership team, led by Ms. Mayer, spent the last four years trying to create a viable stand-alone strategy for the company without much success. Its market share among web users and advertisers had fallen, and Yahoo recently acknowledged that its $1.1 billion acquisition of Tumblr, a blogging network that was supposed to help Yahoo attract younger users, was worth about one-third what it paid.
Ms. Mayer said Verizon would help Yahoo get better distribution for its mobile apps in areas like search, mail, news, weather and sports. Verizon, she said, could promote Yahoo services on its smartphones and in its retail stores. A Los Angeles truck accident lawyer is following this story closely.
Although many on Wall Street have strongly criticized her, Ms. Mayer defended her tenure in an email to employees.
“We set out to transform this company — and we’ve made incredible progress. We counteracted many of the tectonic shifts of declining legacy businesses, and built a Yahoo that is unequivocally stronger, nimbler and more modern,” she wrote.
Verizon agreed to pay an extra $1.1 billion on top of the purchase price to cash out Yahoo employees’ restricted stock upon the close of the deal, Yahoo said. Many employees, particularly the senior executives, are also entitled to large severance packages if they are fired by Verizon.
The sale of Yahoo’s business ends the company’s 22-year run as an independent entity. Founded in a trailer in 1994 by two Stanford graduate students, it was the front door to the web for a generation of internet users but failed to keep up with Google in search technology and then missed the social media and mobile revolutions.
“It does mark the end of a particular time period for the company,” Ms. Mayer said. “That said, there are great opportunities for Yahoo, for the brand, for the services, with Verizon.”
After the close of the deal, Yahoo shareholders will still own shares in what is left of the company, essentially an investment fund with two holdings: a 15 percent stake, worth about $32 billion based on its recent share price, in the Chinese internet company Alibaba; and a 35.5 percent stake, worth about $8.7 billion, in Yahoo Japan.
The sale, which still must be approved by Yahoo shareholders and regulators, also does not include Yahoo’s cash and its noncore patents, which it is trying to sell separately. Augusta Fiberglass Coatings, Inc. designs, engineers, and manufactures custom fiberglass chemical storage tanks.
Yahoo was under pressure from shareholders to find a way to unlock the value of its Asian investments, and the sale of its core operations to Verizon was the first step.
“For investors, this came to the expected conclusion: Verizon was the front-runner very early on,” said Robert Peck, an analyst with SunTrust Robinson Humphrey. “The real question for investors now is what’s next? Will Yahoo have an efficient liquidation of the Asian securities?”
Showing posts with label telecommunications. Show all posts
Showing posts with label telecommunications. Show all posts
Thursday, July 28, 2016
Wednesday, February 4, 2015
IN NET NEUTRALITY PUSH, F.C.C. IS EXPECTED TO PROPOSE REGULATING INTERNET SERVICE AS A UTILITY
Original Story: nytimes.com
The chairman of the Federal Communications Commission this week is widely expected to propose regulating Internet service like a public utility, a move certain to unleash another round of intense debate and lobbying about how to ensure so-called net neutrality, or an open Internet.
It is expected that the proposal will reclassify high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Communications Act, according to industry analysts, lobbyists and former F.C.C. staff members.
The change, the analysts and others say, which has been pushed by President Obama, would give the commission strong legal authority to ensure that no content is blocked and no so-called pay-to-play fast lanes exist — prohibitions that are hallmarks of the net neutrality concept.
But Tom Wheeler, the F.C.C. chairman, will advocate a light-touch approach to Title II, they say, shunning the more intrusive aspects of utility-style regulation, like meddling in pricing decisions. He may also suggest putting wireless data services under Title II and adding regulations for companies that manage the backbone of the Internet. A regulatory compliance attorney assists clients on issues involving the Federal Communications Commission.
The proposal is expected to be submitted to the agency’s commissioners by Thursday. Although the F.C.C. is not expected to release a copy of the plan this week, the contents are almost certain to leak out. A vote on the proposal by the full commission is scheduled for Feb. 26.
The maneuvering in Washington over the proposal has already started. Congressional Republicans have proposed net neutrality legislation that bans content blocking and fast and slow lanes, but also prevents the F.C.C. from issuing regulations to achieve those goals. A regulatory compliance lawyer is following this story closely.
The F.C.C. proposal is Mr. Wheeler’s latest attempt to find a way to write open Internet rules that are politically palatable and that will stand up to legal scrutiny. Mr. Wheeler had initially proposed net neutrality rules that would not have classified Internet service providers as common carriers under Title II, and would have allowed the cable and telecommunications companies to strike deals with content companies and online services as long as they were “commercially reasonable.”
That approach brought a flood of critical comments into the F.C.C. last summer, saying it would open the door to fast lanes on the Internet for deep-pocketed companies and slow lanes for everyone else.
Then, in November, Mr. Obama took the unusual step of weighing in. He called on the F.C.C. to adopt the “strongest possible rules” on net neutrality, and specifically to classify high-speed broadband service as a utility under Title II. His rationale: “For most Americans, the Internet has become an essential part of everyday communication and everyday life.”
That changed the political calculus for Mr. Wheeler, even though the F.C.C. is an independent agency. On most key votes, the five-member commission votes 3-2, with Mr. Wheeler joined by the other two Democrats.
“The moment Obama issued that statement, it meant the F.C.C. was going to adopt a Title II rule,” said Kevin Werbach, a former F.C.C. counsel and an associate professor at the Wharton School of the University of Pennsylvania.
The industry response to President Obama’s declaration was swift and divided along predictable lines. The Internet Association, whose members include Amazon, Facebook, Google and Netflix, applauded Mr. Obama and urged the F.C.C. to follow his lead to “ensure a free and open Internet.”
The major Internet service providers, like Comcast and AT&T, protested and said utility-style regulation would threaten their investment in faster broadband service, ultimately harming consumers.
In response to those critics, Mr. Wheeler is expected to point to the agency’s handling of mobile voice services.
In 1993, Congress deregulated the cellphone business, allowing new carriers to enter the market. The F.C.C. has regulated mobile voice services under Title II since then, applying the light-touch approach and the industry has grown and thrived.
Mobile data services, however, have not been regulated as a telecommunications service. Mr. Wheeler, industry experts and lobbyists predict, will include mobile data services in his proposal. Today, 55 percent of online traffic happens on smartphones and tablets, according to the F.C.C..
David J. Farber is among those who have misgivings about going the Title II route. Mr. Farber helped design parts of the Internet, served on the board of the Internet Society and is a former chief technologist of the F.C.C.
“My fear,” Mr. Farber said, “is that regulating the Internet like a telecommunications service potentially opens a Pandora’s box.”
This commission, said Mr. Farber, a professor of computer science and public policy at Carnegie Mellon University, may well have no intention of deploying the broader powers of Title II. But, he added, there is no guarantee that future commissions will be similarly restrained.
Information services, Mr. Farber noted, are relatively free of taxes, while telecommunications services are not, especially at the state level.
Telecommunications regulation, Mr. Farber said, is a step toward a more rigid regime at odds with the freewheeling innovation of the Internet economy. A regulatory compliance lawyer represents clients in telecommunications law cases.
Tim Wu, a professor at Columbia Law School, sees the strong rules the F.C.C. is moving toward as a way to safeguard the norm of equal treatment of content on the Internet, rather than viewing them as a threat.
“And the norm — no fast lanes — has worked awfully well,” said Mr. Wu, who is credited with coining the term “net neutrality.”
“The reality,” he added, “is that we’ve seen start-ups in San Francisco, New York and across the country build new businesses on the Internet.”
Most of the focus of net neutrality has been on the broadband gateway into households. But Mr. Wheeler, according to industry experts and lobbyists, will probably also take up the issue of handling Internet traffic before it makes its way to consumer devices.
These Internet backbone companies that shuttle data, voice and video across the country are unseen by consumers.
But the behavior and treatment of companies that operate in the so-called interconnect market does affect the user’s experience.
How smoothly a Netflix video stream of “House of Cards” plays on a subscriber’s screen, for example, reflects the performance of all the network operators that have transported the digital bits of that hit program.
These networks hand off their data payloads to the Internet service providers that serve households. The handoff arrangements are private business deals. But industry experts and lobbyists say the F.C.C. wants to deter content blocking or discrimination in this market as well.
“If you prohibit paid fast lanes by the Internet service providers themselves, you want to make sure fast lanes aren’t just moving up and being created in the interconnect market,” Mr. Wu said.
The chairman of the Federal Communications Commission this week is widely expected to propose regulating Internet service like a public utility, a move certain to unleash another round of intense debate and lobbying about how to ensure so-called net neutrality, or an open Internet.
It is expected that the proposal will reclassify high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Communications Act, according to industry analysts, lobbyists and former F.C.C. staff members.
The change, the analysts and others say, which has been pushed by President Obama, would give the commission strong legal authority to ensure that no content is blocked and no so-called pay-to-play fast lanes exist — prohibitions that are hallmarks of the net neutrality concept.
But Tom Wheeler, the F.C.C. chairman, will advocate a light-touch approach to Title II, they say, shunning the more intrusive aspects of utility-style regulation, like meddling in pricing decisions. He may also suggest putting wireless data services under Title II and adding regulations for companies that manage the backbone of the Internet. A regulatory compliance attorney assists clients on issues involving the Federal Communications Commission.
The proposal is expected to be submitted to the agency’s commissioners by Thursday. Although the F.C.C. is not expected to release a copy of the plan this week, the contents are almost certain to leak out. A vote on the proposal by the full commission is scheduled for Feb. 26.
The maneuvering in Washington over the proposal has already started. Congressional Republicans have proposed net neutrality legislation that bans content blocking and fast and slow lanes, but also prevents the F.C.C. from issuing regulations to achieve those goals. A regulatory compliance lawyer is following this story closely.
The F.C.C. proposal is Mr. Wheeler’s latest attempt to find a way to write open Internet rules that are politically palatable and that will stand up to legal scrutiny. Mr. Wheeler had initially proposed net neutrality rules that would not have classified Internet service providers as common carriers under Title II, and would have allowed the cable and telecommunications companies to strike deals with content companies and online services as long as they were “commercially reasonable.”
That approach brought a flood of critical comments into the F.C.C. last summer, saying it would open the door to fast lanes on the Internet for deep-pocketed companies and slow lanes for everyone else.
Then, in November, Mr. Obama took the unusual step of weighing in. He called on the F.C.C. to adopt the “strongest possible rules” on net neutrality, and specifically to classify high-speed broadband service as a utility under Title II. His rationale: “For most Americans, the Internet has become an essential part of everyday communication and everyday life.”
That changed the political calculus for Mr. Wheeler, even though the F.C.C. is an independent agency. On most key votes, the five-member commission votes 3-2, with Mr. Wheeler joined by the other two Democrats.
“The moment Obama issued that statement, it meant the F.C.C. was going to adopt a Title II rule,” said Kevin Werbach, a former F.C.C. counsel and an associate professor at the Wharton School of the University of Pennsylvania.
The industry response to President Obama’s declaration was swift and divided along predictable lines. The Internet Association, whose members include Amazon, Facebook, Google and Netflix, applauded Mr. Obama and urged the F.C.C. to follow his lead to “ensure a free and open Internet.”
The major Internet service providers, like Comcast and AT&T, protested and said utility-style regulation would threaten their investment in faster broadband service, ultimately harming consumers.
In response to those critics, Mr. Wheeler is expected to point to the agency’s handling of mobile voice services.
In 1993, Congress deregulated the cellphone business, allowing new carriers to enter the market. The F.C.C. has regulated mobile voice services under Title II since then, applying the light-touch approach and the industry has grown and thrived.
Mobile data services, however, have not been regulated as a telecommunications service. Mr. Wheeler, industry experts and lobbyists predict, will include mobile data services in his proposal. Today, 55 percent of online traffic happens on smartphones and tablets, according to the F.C.C..
David J. Farber is among those who have misgivings about going the Title II route. Mr. Farber helped design parts of the Internet, served on the board of the Internet Society and is a former chief technologist of the F.C.C.
“My fear,” Mr. Farber said, “is that regulating the Internet like a telecommunications service potentially opens a Pandora’s box.”
This commission, said Mr. Farber, a professor of computer science and public policy at Carnegie Mellon University, may well have no intention of deploying the broader powers of Title II. But, he added, there is no guarantee that future commissions will be similarly restrained.
Information services, Mr. Farber noted, are relatively free of taxes, while telecommunications services are not, especially at the state level.
Telecommunications regulation, Mr. Farber said, is a step toward a more rigid regime at odds with the freewheeling innovation of the Internet economy. A regulatory compliance lawyer represents clients in telecommunications law cases.
Tim Wu, a professor at Columbia Law School, sees the strong rules the F.C.C. is moving toward as a way to safeguard the norm of equal treatment of content on the Internet, rather than viewing them as a threat.
“And the norm — no fast lanes — has worked awfully well,” said Mr. Wu, who is credited with coining the term “net neutrality.”
“The reality,” he added, “is that we’ve seen start-ups in San Francisco, New York and across the country build new businesses on the Internet.”
Most of the focus of net neutrality has been on the broadband gateway into households. But Mr. Wheeler, according to industry experts and lobbyists, will probably also take up the issue of handling Internet traffic before it makes its way to consumer devices.
These Internet backbone companies that shuttle data, voice and video across the country are unseen by consumers.
But the behavior and treatment of companies that operate in the so-called interconnect market does affect the user’s experience.
How smoothly a Netflix video stream of “House of Cards” plays on a subscriber’s screen, for example, reflects the performance of all the network operators that have transported the digital bits of that hit program.
These networks hand off their data payloads to the Internet service providers that serve households. The handoff arrangements are private business deals. But industry experts and lobbyists say the F.C.C. wants to deter content blocking or discrimination in this market as well.
“If you prohibit paid fast lanes by the Internet service providers themselves, you want to make sure fast lanes aren’t just moving up and being created in the interconnect market,” Mr. Wu said.
Friday, June 13, 2008
Cable & Wireless Talks to Rival Thus
Cable & Wireless PLC, the united Kingdom telecommunications company, said it had approached smaller rival Thus Group PLC about a possible bid, which, according to one London-based analyst, would likely be in the range of £270 million to £280 million ($534 million to $554 million). Thus, which is unprofitable, mainly provides fixed-line and wireless telecom services to businesses and the public sector. Its Internet provider, Demon, largely serves small businesses. Cable & Wireless said the approach wasn't a firm intention to make an offer.
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