Recent Yahoo sale news revealed that AT&T has joined the bidding for the Internet company. Apparently, this is the carrier's way to compete with its rival, Verizon.
Bloomberg reported that AT&T's surprise re-entry as a bidder for the Yahoo sale is all about gaining digital advertising assets. Plus, their success would mean another obstacle for Verizon Communications Inc.
On Wednesday, sources confirmed that AT&T, along with Verizon, is interested in the Yahoo sale. Recently, the two largest U.S. carriers are going through a dismal period in terms of subscriber growth and competition from smaller rivals.
Verizon is currently facing a big problem with its workforce with nearly 40,000 workers continuing their strike for better benefits. The strike began on Apr. 13 and is now nearing its second month.
It was said that the two companies are looking to video as a new source of revenue. To complete their efforts to increase sales, they would need advertising technology.
"It was always thought that Yahoo would be a natural fit with AOL at Verizon, so the level of interest from AT&T's decision to swoop in is surprising," Macquarie Capital analyst Amy Yong said. "Much of this is competition to block Verizon."
The publication added that Yahoo would be a strategic fit for AT&T because of the carrier's ambitions about digital video. Last year, it acquired DirecTV for about $50 billion. The company is also expected to offer online streaming video service this year.
According to Deadline, it is unknown how much AT&T offered for the Yahoo sale. The website reached out to the carrier but it has declined to comment. The second round of bids is believed to happen during the first week of June.
Other bidders in the Yahoo sale are private investment firm TPG Capital, former Yahoo CEO Ross Levinsohn and his group, Bain Capital, Vista Equity Partners as well as Quicken Loans founder Dan Gilbert with investor Warren Buffett.