Analysis of Yahoo INC., AOL and Fleetmatics's Acquisition by Verizon Communications - Its Business Growth in the Wireless Service Sector

The period from 2006 to 2015 can easily be called a golden period in the history of Verizon Communications. The company witnessed the compounded growth of at least 4% on a yearly basis in its revenue on the New York Stock Exchange. This golden period for Verizon has contributed to sales of almost $88 billion in the government assisted cellphone sector. 

Verizon’s wireless service subscribers increased at a rate of 9% every year from 2006 to 2015. In simple words, the company’s consumer pool grew from 59.1 million subscribers in 2006 to almost 140 million subscribers in 2015. Coming to the revenue, it grew at a pace of 9.2% every year.

To be honest, it is not so easy to continue consistent growth in the wireless business sector. There are not many subscribers available in the market for the company to switch subscribers from their current government assisted cellphone service providers to Verizon’s free cellphone plans.

This is perhaps why the company is facing a snail’s pace growth going forward in the wireless sector. And this just seems to be the icing on the cake. There could more serious reasons responsible for leading the company towards potential financial disaster in the times to come. Let’s now go through those reasons and analyze Verizon’s financial future in the government assisted cellphone sector.

The company lacked patience for seeking new growth in wireless advertising and IoT (Internet of Things) considerably. Rapid acquisitions by Verizon Communications cannot be ignored. How? See below:

• AOL’s acquisition at a cost of $4.4 billion in the month July 2015.
• The company took no time in buying a privately held company named Telesis at the start of 2016.
• Recently the company has paid almost $2.4 billion for taking over Fleetmatics.
• The biggest announcement came when Verizon Communication announced the acquisition of Yahoo INC, one of the largest e-mail service provider in the world, at a cost of $4.8 billion.
• Increasing market impact of new business has also played an important role.

 Most experts, including the entire management of Verizon Communications, are very positive about finding new business growth, especially in the domain of government assisted cellphone and free cellphone plans including the Internet of Things.  

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Verizon communication’s acquisition of AOL and Yahoo INC indicates that free cellphone plans had been setup for ripping through the internet and all forms of media in future. The combined acquisition of Yahoo INC and AOL is a golden opportunity for new growth in the wireless sector via more than 600 million mobile users and almost 280 million e-mail users.

Most importantly, Verizon’s revenue will increase to help the company increase its market share up to 10%. In this way, the company will only be behind Facebook with 30% and Google with 16% market share.  These Acquisitions must help Verizon’s advertisement business on wireless devices through free cellphone plans without much problems.