AOL CEO Tim Armstrong 'cautiously optimistic' the Verizon/Yahoo deal will still go through (VZN, YHOO)
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NEW YORK — AOL CEO Tim Armstrong says he is "cautiously optimistic" that parent company Verizon's plan to acquire Yahoo will go through.
Verizon announced its intentions to buy Yahoo for $4.8 billion in July this year, but the deal has taken a long time to close after Yahoo admitted in September it had suffered a catastrophic hack affecting more than 500 million accounts.
Yahoo gave Verizon just two days notice before informing the public about the security breach and Verizon is reportedly seeking up to a $1 billion discount on its original offer price, having said it viewed the incident as having a "material" impact on the deal.
Nevertheless, Armstrong told the audience at Business Insider's IGNITION conference in New York City on Monday that he is "cautiously optimistic — or optimistic" that the acquisition will still go ahead.
Pressed by Business Insider US editor in chief Alyson Shontell whether he was perhaps "80%" optimistic, Armstrong said he didn't want to put a percentage against it.
Verizon and Yahoo are currently in the process of planning strategy and in the next 60 days the companies will start planning what the structure of the merged entity will look like, Armstrong said. By the first quarter of next year, there will be more of an idea as to the organization's "viewpoint," he added.
The Mayer question
Armstrong and Yahoo CEO Marissa Mayer have a working relationship going back almost 20 years — they both used to work at Google — and Armstrong suggested that he'd like her to stay on once, and if, the deal completes.
"Hopefully, as we go forward, Marissa will play a role in getting Yahoo to the next generation of what Yahoo is going to be," Armstrong said.
Pressed by Shontell whether Mayer will definitely stay on once Yahoo becomes a Verizon company, Armstrong said: "I'm not going to speak directly for Marissa, but I think that's accurate."
As for whether other employees might have to leave once the two companies merge, Armstrong admitted there may be "synergies". Earlier this month, AOL announced plans to layoff around 500 employees from its global workforce — a move Armstrong told IGNITION was to help the company "get in front of change," simplify its product portfolio, and reduce its corporate infrastructure to move itself towards profitability.
In a digital media world dominated by Facebook and Google, Armstrong explained AOL was differentiating itself by focusing on the "brand space" and having invested heavily in specialist ad technology, such as multi-touch attribution — being able to track conversions as consumers switch from different media and commerce channels.
Armstrong said: "[We do that by] being a facilitator and getting fanatical fans onto different brands and representing what they are across OTT, cable, and everywhere you put a brand. Secondly, on the advertising and commerce business, really helping people how you take brand advertising in the digital age and drive through the conversion funnel overall. It's a differentiated viewpoint."
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