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5 things to know about Verizon's $4.8B Yahoo deal

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Verizon Communications (VZ) made no secret of its interest in acquiring Yahoo (YHOO) ever since the Internet pioneer surrendered to pressure from activist investors and earlier this year announced plans to sell itself.

On Monday, the largest wireless service provider confirmed its $4.8 billion acquisition of Yahoo's Internet business, beating out competitors like AT&T (T) and Quicken Loans founder Dan Gilbert. Here's a closer look at what Verizon fought long and hard to acquire -- and whether its effort can pay off.

What does the deal include? Verizon purchased Yahoo's core business, including sites such as Yahoo Finance, Yahoo Sports and Yahoo News that combined attract 1 billion monthly users and make Yahoo one of the most popular destinations on the web. New York-based Verizon also is getting Yahoo's real estate holdings in California and elsewhere.

What does it not include? Yahoo's lucrative stakes in the Chinese Internet giant Alibaba (BABA) and Yahoo Japan along with the company's more than 3,000 patents are not included in the purchase price. Those holdings could be valued at more than $40 billion, according to Investopedia calculations.

What's in it for Verizon? Growth in the U.S. wireless market surged earlier in the decade thanks to the popularity of smartphones such as Apple's (AAPL) iPhone. Demand for these devices has slowed lately because as analysts have noted, most everyone who wants a smartphone has one. As a result, wireless companies can only grow by stealing each other's customers. That's why Verizon decided to enter the digital ad market last year through its $4.4 billion acquisition of AOL. Robert Salomon, a professor at NYU's Stern School of Business, notes in an email that Verizon is more interested in Yahoo's ad technology than its content, although these offerings "might be helpful on the margin."

Will it work? Experts are skeptical. For one thing, Verizon and AOL combined will control less than 5 percent of the global digital ad market compared with Google's (GOOGL) 30.9 percent and Facebook's (FB) 12 percent, according to eMarketer. As Salomon notes, Verizon and Yahoo are vastly different types of businesses which will make integrating them a challenge. "I think it will be difficult for (Verizon) to convince talent from Yahoo to stay," he writes.

What about Yahoo CEO Marissa Mayer? Activist investors have for months been clamoring for the ouster of Yahoo's CEO, arguing that her strategy has failed and that she has been overpaid for her efforts -- including a near-$36 million compensation package last year. For now, though, the 41-year-old isn't going anywhere, stating in a press release, "I love Yahoo ... It's important to me to see Yahoo into its next chapter." Mayer indicated on Monday she would like to remain at Yahoo after next year's expected closing of the Verizon sale: "We will ultimately figure it out," she told Bloomberg TV, referring to her future at Yahoo.

Eric Jackson, managing director of Owl Spring Asset Management, an activist investor that has been critical of Mayer as Yahoo's CEO, expects her to leave soon after the transaction closes. "I think the most important thing is that [Yahoo] did reach a deal with somebody to acquire the core business," Jackson said, adding that he was disappointed the price wasn't higher.

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