Verizon May Beat AT&T in Bidding for Yahoo

Verizon to overtake Yahoo

According to financial analysts at Barclays, AT&T does not seem to be serious about bidding for Yahoo, leaving Verizon to be the front runner buyer of the company.

A research note written by Barclays analysts says “We are hard pressed to see AT&T enter the Yahoo frenzy.” “Recent reports from Bloomberg suggest that AT&T might be interested in Yahoo’s Internet business. While it is premature to assume that AT&T is not interested, we find it hard to envision the carrier earnestly would move forward with a bid given it has its hands full integrating DTV, is participating in the broadcast spectrum auction and seems focused on asset optimization vs. augmentation.”

AT&T’s decision to buy Yahoo would depend on many aspects, such as the content included in the deal, the scalability of the deal in terms of subscribers, the additives available through transaction and the bidding amount.

Last month, AT&T emerged to be in direct competition with Verizon by submitting a bid for Yahoo. The internet company received nearly 10 offers ranging from $4 billion to $8 billion from the interested companies. AT&T was initially disinterested but later entered into the list of bidders by submitting a bid for the company’s core internet business. Other bidders include entities supported by Warren Buffett and Bain Capital.

AT&T is currently working to incorporate its $49 billion purchase of DirecTV. The company has committed to offer a refreshed DirecTV service with availability across AT&T’s networks as well as the networks of its competitors in the later part of this year.

The company seems interested in Yahoo’s advertising business, as it may help in AT&T’s strategy to increase its advertising technologies and offerings. The results of the cross-screen advertising trials for AdWorks business conducted with Opera Mediaworks, was announced by the company last month. Among the companies that participated in the trials, Walmart was also one and reported “a statistically significant lift in both brand and message favorability.” The trials pooled the advertising reach of AT&T’s 13 million TV households with 285 million mobile phones running the advertising technology of Opera.

As per Barclays analysts, the bidding for Yahoo is one of the rare major potential transactions in the telecom sector. “The combination of a presidential election year and the current broadcast spectrum auction process has diminished the prospect for larger scale M&A activity across the U.S. telecom sector, in our view,” commented analysts.

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