Yahoo and AOL are going to establish a new company under Verizon that will be called Oath. The new company will officially start doing business this summer, immediately after Verizon’s acquisition of Yahoo is completed.
The head of AOL, Tim Armstrong teased the launch of the new endeavor in the Twitter post. The name of the company was mentioned for the first time by Business Insider, and Armstrong wrote: “Billion+ Consumers, 20+ Brands, Unstoppable Team. #TakeTheOath. Summer 2017.”
AOL spokesperson has also added: “In the summer of 2017, you can bet we will be launching one of the most disruptive brand companies in digital.” According to a report from Recode, Yahoo’s CEO Marissa Mayer will not join the new business, whereas Armstrong will be a part of the team. Unlike AOL, Yahoo representatives were unwilling to comment the Recode report.
However, Mayer said last July: “For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter.” This next chapter Mayer refers to will begin when Verizon closes the deal to purchase the company.
In July 2016, Verizon agreed to buy Yahoo’s core Internet business for $4.8 billion, and its goal was to use this acquisition in order to assemble an online advertising powerhouse and thus go against Google and Facebook. However, after finding out that Yahoo had suffered two large security breaches that affected one billion users, the deal was in jeopardy.
The investigation is in progress, and last month the Department of Justice found out names of the four individuals that were involved in hacking, together with two officers of the Russian Federal Security Service. Because of this, the two companies came to an agreement to reduce the price by $350 million and to split the cost of legal liabilities that arose due to these breaches.
According to an independent investigation that ended this year, “certain senior executives [at Yahoo] did not properly comprehend or investigate” the security breach. What will remain of Yahoo are investment holdings in Alibaba that will be named Altaba. Also, Mayer will withdraw from the position once the sale is complete and Yahoo as we know it will come to an end.