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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 in itunes soundcloud feedburner tune in and google play music so nicely done tomorrow alright thanks guys
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