'Verizon (VZ) Moves Further Into Digital Space,' Recode's Swisher Tells CNBC

Executive editor of Recode, Kara Swisher, joined CNBC's 'Squawk Box' this morning to comment on Verizon (VZ) buying Yahoo! (YHOO).
By Giovanni Bruno ,

NEW YORK (TheStreet) --Verizon Communications  (VZ) - Get Report  has officially won the bidding war to acquire Yahoo! (YHOO) and will pay $4.8 billion to purchase the company. In the deal, Verizon will be obtaining the company's core Internet properties, in order to increase digital advertising and media business, Reuters reports.

Kara Swisher, executive editor of Recode joined CNBC's "Squawk Box" on Monday morning to comment on the deal and detail its impact from both company's perspectives.

"They're (Yahoo!) now owned by a big company with lots of money, and lots of ability. Verizon must differentiate themselves in the market, and prior to this they had minimal mobile advertising skills. Verizon has to move further into this digital space, and this allows them to do that," Swisher explained.

Swisher mentioned the lack of confidence in Yahoo! CEO Marissa Mayer. Swisher seldom felt comfortable with Mayer in the position citing consistent errors and a lacking ability to innovate.

"Obviously you've seen Marissa Mayer struggle mightily to try to make Yahoo! relevant again, it seemed nearly impossible. I don't think it's impossible, I think she made a lot of errors along the way," Swisher said.

"There's been no new products, she says she's working on them, but they haven't come out," Swisher continued, noting that Yahoo has been lacking when it comes to innovation. 

In regards to Verizon the move begins and ends with being able to differentiate themselves from other media giants such as Facebook (FB) and Google (GOOGL). "The idea is to have this multi-brand strategy. They've got The Huffington Post, they've got the Yahoo! property, and now have all the ad tech and publishing in the background," Swisher noted.

Shares of Verizon are higher by 0.68% to $55.45, and shares of Yahoo! are lower by 0.79% to $39.07 in pre-market trading Monday morning. 

Separately, TheStreet Ratings rates Yahoo as a "Hold" with a ratings score of "C-." The primary factors that have impacted TheStreet Ratings rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.

The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, TheStreet Ratings also findS weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

TheStreet Ratings objectively rated this stock according to its risk-adjusted total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

You can view the full analysis from the report here: YHOO

Loading ...