Yahoo Deal Hints At Verizon’s eCommerce Ambitions

When the top line claims are big and bold – which they certainly have been when it comes to Verizon’s nearly $5 billion dollar acquisition of fallen internet behemoth Yahoo! – the smaller stuff settles down a paragraph or two.

So, everyone knows that with the big (but bargain) buy-out of Yahoo’s assets, Verizon is making a play on the digital media and content markets – mostly because Verizon’s CEO Lowell McAdam basically said as much.

“Verizon intends to be a significant player in this space,” Mr. McAdam noted on a conference call.

Getting less big attention is Yahoo’s attendant acquisition of Aabaco Small Business – Yahoo’s e-commerce platform.

If you’ve never heard of it, it has also been called Yahoo Small Business and Luminate.

Yahoo has tried to sell it before – last year the firm attempted to bundle Aabaco into a sale with 384 million shares of Alibaba. That deal was largely designed to help Yahoo avoid some of the massive tax bill on the $7.6 billion Yahoo snapped up when Alibaba bought back part of the 40 percent of the Chinese company that Yahoo had bought for $1 billion in 2005.

It was a solid return on investment.

Sine Aabaco was part of an operating unit connected to the Alibaba profits – the hope was that taxes could be drawn down. That hope was crushed when the IRS wouldn’t confirm that such a move would not cost Yahoo billions in taxes, so they scrapped the plan.

And while most of us are unfamiliar with the Aabaco platform, it is actually more prevalent in the market than one might guess – 41 of the 1,000 largest online retailers in North America use its platform. That used to be higher – in 2010 it was 65 of the top 1000 – but given Yahoo’s various struggles, it’s impressive that it has held on as well as it has.



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