Verizon bets $4.8 billion on Yahoo... why? The 3:59 podcast with Roger Cheng & Ben Fox Rubin
Verizon bets $4.8 billion on Yahoo... why? The 3:59 podcast with Roger Cheng & Ben Fox Rubin
2016-07-25
hello happy monday we're here we're here
somehow miraculously we made it we're in
the nice studio yeah we're I don't know
why we got kicked up somehow it got
promoted to the cool studio for now
they're gonna Damona soon enough so
don't worry know why we're here welcome
to another episode of 259 this thing
that thing what are we talking about big
headline for this morning verizon with
its mega-merger buying yahoo yeah trying
to make sense of that that's surprising
this has been anticipated not the right
time but it's uh it's it's a bit of a
head-scratcher because figure out why a
lot of talk about so wouldn't want to
spend nearly five billion dollars on
yahoo next up will be talking about the
Democratic National Convention are on
Maggie Reardon is at the at the event
and she'll be reporting from there for
throughout the week we've got a good
story from her today about crowdfunding
yeah crowd funding I lastly just a
little bit of fun we're gonna talk about
comic-con and our reactions to some of
the hotter trailers that came out Wonder
Woman and Justice League yes yes i watch
them both you see otsuka be like i'll
save something for the pie yeah we can
talk about the podcast how many how many
dark Zack Snyder comic book movies could
could we get shoved down our throats
apparently in arilinn yeah amount if
Warner Brothers has its way all
ceaseless just never read extremes
you're making my elastic superhero
movies that will that will take our
money yeah so so funny to talk about
today yes growing one day in the summer
I know that it's supposed to be quiet
right this is supposed to be the dog
days where we at the dog days yet we're
definitely there their dogs around Paris
all right as always if you have any
questions about any of these topics feel
free to leave them in the comments
section our producer Brian will let some
of these questions on to us and we will
do our best to answer them although I
don't really know anything
no kidding uh let's let's get started
with the the taping all right whenever
you're ready you guys ready we do yep
okay let's kick off recording in three
two welcome to the 359 when we talk
about the top tech news of the day and
I'll get the crap you want to throw it
I'm Roger chan I'm Ben Fox Rubin so it
finally happened verizon acquired yahoo
for four point eight billion dollars the
deal which long been rumored well
theoretically bolster verizon's digital
ad immediate business which I first
jumped into last year with this
acquisition of AOL but then does this
make sense to you only a little because
of the AOL purchase but right what
exactly they can actually end up doing
with these two well past their peak
their net pioneers yeah it's fine as if
it becomes for this collector of
trailblazing internet companies from my
way back in the day we're that long
since loss of relevancy yeah they're
gonna buy like the manufacturer of
Rubik's Cube sometimes we'll look the
idea is yah verizon you know doesn't
just want to be your phone copyright
they're there they feel like there's
limited growth there so they want to
they want to branch out they want to
take on Google they want to take on
Facebook they want to be this ad
platform and they feel like with the
reach that they have like 112 million
done hundred twelve million wireless
connections that they they could do this
with this ad platform that they're gonna
be inheriting or building together with
yahoo and AOL I kind of like 80 and
tease play a little bit more on this
they seem to make more sense right yeah
they did this like really splashy much
bigger acquisition of directv and that
to me seemed to be like a much better
glom on onto a phone company right this
you're taking you're taking assets that
are already kind of weak somewhat
tarnished have been in a perennial
turnaround state and we'll see what
Verizon ends up doing with this kind of
stuff yeah just you know the verizon for
last year so has been really keen on
trying to go after the Millennials they
tried to do this with go 90 the video
app mmm
the thing of it is with Yahoo Yahoo's
audience skews a lot older you know
folks who does when I think yahoo i
think millennial well that's the thing
it's like I don't know if they they
quite get what they acquired since it's
the audience that follows Yahoo isn't
really the audience to go after well
luckily they get tumblr out of this
entire it's really impressive right i
mean like that's something they thought
tumblr i have tumblr accounts really not
just a little bit too i don't have any
all right next up the democratic
national convention starts today in
philadelphia my hometown and plenty of
delegates got to the city of brotherly
love using crowdfunding since it can
cost something like four thousand
dollars to get to their folks have used
GoFundMe or IndieGoGo those have become
much more critical to delegate so that's
pretty cool yeah so the cool thing is
like this is sort of like the modern-day
take on like hosting a party in the bar
with your friends and raising funds to
send you after this these conventions
like good they've always been expensive
and it's kind of crazy it's surprising
to me that it's four thousand dollars
like it could cost you as much as four
thousand dollars like the hotels like
the price on the hotels can go up like
crazy like mansions in the story that
it's like three hundred and eighty
dollars a night yep which i will tell
you boys much'll adelphia that is as you
like as much as six hundred dollars at
night and there's no choice like you
have to stay at these designated hotels
right so why don't one of the
interesting fun facts from the story
GoFundMe mentioned that it helped raise
more than 385,000 dollars for more than
360 delegates so cool not not a small
amount that not too shabby ro Maggie Rin
will be on at the DNC so expect more
dancey coverage from cnet throughout the
week lastly just one talk about
comic-con and our reactions zack snyder
is at it again with clips from Justice
League what do you think well there was
like some humor in there but you could
tell it was still Zack Snyder doing it
so drag grim very agreement dark still
right wasn't that impressed i I really
don't think that their DC is gonna be
able to capture the same excitement or
the same amount of money as the Avengers
but hey at least they're trying so right
for that and look it's it's a good sign
that it seemed like
there was more humor that trailer than
the entire movie of Superman vs Batman
so or not that is clearly a high bar or
anything but at least that's a good sign
and then lastly the Wonder Woman trailer
yeah also air I actually thought the
Wonder Woman trailer was more impressive
i'm more excited about that movie that
yes i'm in love with that actress so
should i have not no I'm sorry honey
she's a very striking woman yes
absolutely so I think that movie will
probably do pretty well I would imagine
yeah well it just it's interesting like
at prior to the whole Zacks higher error
it be it's interesting to note that
we're more interested in a Wonder Woman
standalone Wonder Woman movie thing like
the Justice League movie that the whole
shebang that's a true that's true so
anyways why know more about these
stories check us out on cnet I'm Roger
Cheng I'm Ben Fox Rubin thanks for
listening so long right yeah extended
version of a 359 we just gotta get we
just got too excited talking about those
trailers talking about yeah yeah and and
we had a lot of things to say about
verizon of course yes um that it's a
head its head scratcher right yes and no
they're trying to expand they're trying
to do something different I don't know
that it's gonna work yeah the carriers
have had a very mixed history when it
comes to doing things that are not part
of their core business when they get
away from serving you phone business or
phone services that's when they think it
kind of tripped up so we'll see what one
of the things that I thought was also
interesting i read the story in The
Seattle Times they had like a good
analysis that said like why does the
phone company not want to be your phone
company anymore it has a lot to do with
the fact that like anybody that wants a
smartphone we've talked about this on
the show a bunch yes I like anybody that
wants a smartphone already has a
smartphone yep there's like already been
all of that innovation that's happened
so well there's that what's verizon it's
not there's that whole the dumb pipes
stigma right they don't want to be the
dumb pipe where all you're doing is
paying for access they want to be seen
as a company that innovates that does
different things and they they have a
bit of envy when it comes to looking at
Google and Facebook and sort of the
puzzle so called over the top players
and they want a piece of that action
right it's just google and facebook or
making money hand over fist on those ads
and
fry's I'm just once again that game I
don't know that they do that with yahoo
and AOL though ya know like so they do
have these platforms now that they
didn't have to build from scratch but I
mean it like their their time passed a
long long time ago and AOL became a much
sexier player by reinventing itself is
like an ad platform right so what it
actually does is a lot more backend
stuff you know like consumers are which
is which is to be fair what Verizon
really wanted right they got some of the
other assets like like TechCrunch and
engadget like various media assets that
sort of came in with the deal but they
were more interested in that ad platform
hmm hey got some questions all right
lame on us let's do it Colton wants to
know what you guys think verizon will
actually do with John right so basically
what we've got a question yeah is is
they're gonna they're gonna use it I
think primarily for ads yeah you know
like they're gonna use it as like an ad
exchange or like an ad platform the
problem is is that with Yahoo it's still
like it doesn't have a social element to
it but it doesn't really it's so its
search element as in as strong as
Google's so it doesn't have as much
information as Google or Facebook does
about who you are which means they won't
be able to sell ads as as much as a
premium well you know they also have
yahoo yahoo side they have a number of
interesting mobile applications
properties that really having done their
fair shake right like tons of people
still use yahoo mail yahoo finance yahoo
sports online I don't think they've
really gotten that reach on their mobile
apps that was one of the points that
Marissa Mayer made on her press called
today was that she's hoping that with
verizon's reach you can get more people
engaged in yahoo's mobile apps yeah but
like why does verizon care about yahoo
mail like how does that benefit verizon
to like overhaul yahoo mail in some way
if you're i guess if you're staying
within the verizon ecosystem you know as
opposed to pimp you know using gmail
using all these other services you know
you're on your verizon phone you're
using your yahoo mail app brought to you
by Verizon it's it's your part of this
broader present an ecosystem like right
yeah so to go back to answer what we
know right now about that question
which was that was so in the immediate
term yahoo and AOL are gonna get married
and they're gonna have yeah they're
gonna have like one verizon executive
leading both of them Marnie Walden yep
right and Marissa Mayer who's the CEO of
yahoo says that she's gonna stick around
yeah I feel like her little that's
definitely for perception saying I mean
she says she loves yahoo sure she loves
like the options she's gonna get off of
this deal but and she says she's gonna
stick around but you know I would be
surprised if once the deal is closed
that Marissa finds her way you know out
the door so I read a story that
mentioned the Marissa with all the
options and everything yes she's gonna
walk away with about 218 million dollars
something like that yeah after failing
to turn around yahoo over four years so
goes to show you come a CEO to good gig
boys and girls become a CEO just you
know mess up succeed it doesn't really
matter you're still gonna make a lot of
money the way absolutely true oh gosh
wants to know yes if they just bought it
for daddy user adds in the revenue model
also will this just be another failed
venture like what happened with Nokia Oh
like the no Kid Microsoft nokia do you
mean probably yeah stemming from that
why didn't Microsoft take a bit honest
no I don't think I mean Yahoo's very
consumer centric and it's all about
their so their online properties I don't
know if Microsoft it would make sense
for Microsoft abide Microsoft's they did
bid on them years ago years ago a lot
more money but that was back when they
were trying to be more of an online
presence than yeah I mean they're their
business is definitely more cloud
services enterprise stuff yeah they've
changed from they've definitely shifted
focus it doesn't make sense for
Microsoft to really deal with Yahoo at
this point look it could end up becoming
another nokia situation for sure which
ended up being like a total disaster the
thing is is that I think Microsoft spent
a lot more money on nokia than pricele
did on on AOL or yahoo so i think what's
really important to pay attention to
here is that verizon's core business is
still its core business and it doesn't
necessarily need
oh and hey oh wellz make a ton of money
for that in fact they just need them to
not lose a lot of them I think at this
planet be it's gonna take years if for
whatever reason they hit home run after
home run it's still not gonna move the
needle on verizon's business they make
so much money charging you for your
wireless service Natalie monthly that it
just it doesn't really matter like this
is a pet project that they can sort of
have sitting around for the next few
years yeah and and theoretically yahoo
could actually commit to a real turn
around right now being hidden inside
like this giant superstructure of
verizon and like maybe a will real more
this is being overly optimistic right i
believe look at the best case scenario
best-case scenario though real Mort
reemerges a butterfly you know it's like
five years from now no longer under the
percent like you know yeah the bright
lights of Wall Street but that's that's
really a very optimistic picture that's
extremely Rosie do you think that
Verizon gain from had no major hi Ezra
for Yahoo you think was a steal do you
think 4.8 billion was it no it was not a
steal I don't they go steal theirs
pretty expensive acquisition sizzix a
they just wrote down the tumblr deal I
was that itself was worth a billion
dollars this thing is a fixer-upper and
with fixer-uppers you don't know if the
foundation is broken yeah so i think
verizon obviously had to factor that in
I mean they look they're looking at this
not as necessary turn around project
there they want to take elements from
this Yahoo deal or yahoo assets combined
with AOL and create this this massive
digital ad platform it's still to be
seen whether or not that will actually
pay off so that's I mean that's why it's
the fantail is it it's a big gamble here
for sure yeah right any other questions
do you think no other day that is rising
good as she gained control of young ass
uh yeah I got I mean I think a most
likely yahoo also runs someone
independently AOL is still run by Tim
Armstrong he runs independently they
sewed the report up the morning Walton
his are the head of rises new business
ventures but I think they've been
running fairly independently we'll see
and I'm sure given now that they've
invested almost nine
between AOL and Yahoo they'll probably
have a firmer hand on control of these
assets but I'd imagine at least for end
users you're not gonna see a huge
difference for a while yeah he finds a
deal doesn't close until the first
quarter yeah it's interesting you also
mentioned the tim armstrong is still in
control of yahoo yep I would find myself
very surprised by larissa oh sorry yeah
of AOL I would find myself very
surprising Marissa Meyer a year from now
is still in control yeah yeah I would
imagine if Tim Armstrong is still around
a verizon he would probably be
overseeing the combined assets mmm ok so
y se i'm also very curious to see what
they do end up spinning off if they end
up like absorbing both of these guys or
if there's something they can get rid of
just to turn a quick buck yeah well i
mean you could have said that with AOL
right they had a ton of assets are not
really connected to verizon's core
business or even what they want to do
including like engadget i thought they
were gonna sell their those are all
assets are still in control of row of
verizon so yeah there were actually a
lot of rumors that they were gonna sell
off huffington post remember a long time
and those have since prided down never
happened never happened the phone
company still controls huffpo and I
don't know no Nets we'll see alright
lastly yes polar what what is polar
polar is a delicious seltzer so we have
for free in our office they're not an
advertiser if that's what you're asking
they should actually forgot the name of
the drink i stress i know i've just been
grabbing it serve subconsciously I think
I think we've been I'm I try to hide the
label yeah I'm just because we know that
they had advertising yeah I do a really
poor job of hiding the label but we're
definitely not a sponsor mugs yes we
really do yeah aving a wire question
weaken and is actually a good one yeah
they say in Florida this one's for
roadie in Florida horizon soul internet
service to frontier and switched all
mail to AOL will this merger switch the
mail service back to yahoo oh that's a
good question and it's really good
question yeah I think it would be too
destabilizing for AOL mail users to
switch over to yahoo plus yahoo mail I
think
kind of terrible well actually i use
yahoo mail so do i that's how i know
it's terrible i think there's a there's
a distinction cuz AOL because of his
legacy as an Internet service provider
but people had email accounts that were
sort of tightly linked to their service
right whereas Yahoo's to sort of like
anyone could sign for a yahoo account
it's not linked to anything particular
so I can't imagine that they'd force she
moved to move that 22 yahoo mail I think
everybody is like jumping ship to
something else by now like Gmail or
whatever so I don't want to give you an
excuse to leave and that would be that
would be nice to pay that they booted
you off of the service you that on for
years yeah so good question I wouldn't
expect it yeah yeah for sure alright
well I think that's a wrap good
questions really good questions yeah
love it but we'll be back tomorrow if
you like ap you saw or heard here check
us out on cnet.com podcast is available
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and google play music so nicely done
tomorrow alright thanks guys
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