Verizon is walking a fine line amid rumors that it might bid for some of Yahoo's key properties. At an industry conference in New York on Monday, Verizon chief financial officer Fran Shammo said it was too early to say whether Verizon would buy, but that "if Yahoo is right," it could be interested.
Yahoo is said to be weighing a sale of some of its core Internet businesses, such as search, media and advertising, amid weaker-than-expected growth under chief executive Marissa Mayer. Although Yahoo has been struggling to turn itself around for several years, the fact that its sites draw a tremendous number of visitors every month makes it an attractive target for would-be kingpins of Internet content. Shammo's comments Monday were the first official hint of interest from a major company that, analysts say, could be among Yahoo's potential buyers.
If Verizon gets more serious about buying Yahoo, the resulting deal could turn the telecom giant into a network/media hybrid similar to Comcast-NBCUniversal, which controls not only a portal to entertainment but also much of the actual entertainment itself. Verizon has made tentative steps in this direction already by buying AOL this year — a company that owns the Huffington Post and major tech sites such as Techcrunch and Engadget. Using AOL's substantial advertising technology, Verizon might even be able to supercharge the revenue generated by all those Yahoo visitors in a way that Yahoo perhaps doesn't.
Verizon and other telecom companies operate high-tech communications networks, but as more Americans stream music and consume high-definition video on their mobile devices, it's becoming clear that the most valuable thing is what's traveling over those Internet pipes. So network providers have increasingly eyed content firms as a way to boost their competitiveness.