Yahoo and AOL to form new company called Oath
Verizon’s long-promised acquisition is expected to close by the end of June
13 April, 2017
Verizon will acquire Yahoo's core internet business for about $4.8bn in cash.
Verizon’s long-promised Yahoo acquisition has a name. And it, for some reason, is Oath. AOL CEO Tim Armstrong acknowledged the strange new branding on Twitter last week after word leaked out that the four-letter word was set to become the love child of the forthcoming AOL-Yahoo merger.
“Billion+ Consumers, 20+ Brands, Unstoppable Team,” Armstrong tweeted. “#TakeTheOath. Summer 2017.” AOL has further commented mysteriously: “In the summer of 2017, you can bet we will be launching one of the most disruptive brand companies in digital.”
In a deal that was announced in July, Verizon will acquire Yahoo's core internet business for about $4.8bn in cash. Yahoo will be merged with Verizon's AOL unit under Marni Walden, the executive vice president and president of product innovation and new businesses, with Verizon scooping up Yahoo's search, mail, content, and ad-tech businesses.
In January, CEO Marissa Mayer stepped down from the company’s board. Yahoo announced in a Securities and Exchange Commission filing that after the close of the merger, the parts of Yahoo that Verizon is not buying - which includes Yahoo's 15% of the Chinese retail giant Alibaba and a part of Yahoo Japan, a joint venture with SoftBank - would continue under the name Altaba. It's unclear if the Yahoo name will live on for any part of the internet business that will be run by AOL. However, a big new branding campaign is expected in the coming weeks, along with more details about the new company.
Yahoo declined to comment on the new name. While an AOL spokeswoman neither confirmed nor denied the new name, she told listeners to watch for the "launching" of the new company.
"In the summer of 2017, you can bet we will be launching one of the most disruptive brand companies in digital," she said.
The Yahoo-Verizon deal is supposed to close in the second quarter of 2017, perhaps on or before 24 April. After this date, the parties can seek a three-month extension, but there's also an opening for either party to terminate the deal.
But do not count the legacy brands out just yet: Yahoo, AOL and The Huffington Post will continue to exist and operate with their own names - under the Oath umbrella. Verizon has said that much of Yahoo’s value lies in its deep relationship with its customers, and services like Yahoo Finance and Yahoo Sports engender deep loyalty among users. Similarly, AOL.com and AOL Mail still have followings.
But Oath will be a way for Verizon to present its family of digital content services to advertisers and other partners as a single entity. The company could also develop some new services under the Oath brand.
Many greeted the announcement with bewilderment, with some suggesting that Oath sounded like the name of a heavy metal band. Others compared it to Tronc, last year’s largely panned rebrand of Tribune Publishing, the company behind The Chicago Tribune, The Los Angeles Times and several other major daily newspapers.
TechCrunch, the Silicon Valley news site, summed up the general confusion in the headline of a post about the announcement: “Yahoo + AOL = Oath, for some reason,” it read.