Verizon eyeing Yahoo for mobile video ads and users

As previously reported, Yahoo has mentioned plans to spin off its core business, now, according to Bloomberg, Verizon is considering buying Yahoo with AOL CEO, Tim Armstrong overseeing the proceedings. Verizon's interest in Yahoo stems from the large user base on offer and Yahoo's revenue-generating mobile video ads. With the Interactive Advertising Bureau expecting marketers to increase their digital video ad budgets in the next 12 months, Verizon could do well buying its way into that market.

Verizon, which acquired AOL last year, is now reportedly interested in taking on Yahoo as well.

According to Bloomberg, the wireless telecom giant has tasked AOL CEO Tim Armstrong with figuring out how to make it happen.

As Ars reported late last year, Yahoo announced that it would reverse course and not sell its Alibaba investment. Rather, the board of directors said Yahoo would now work to spin off its core businesses , keeping the original company as a holding entity for the Alibaba shares. The company explained that the tax climate for spinning off Alibaba holdings was simply unfavorable for investors. CEO Marissa Mayer also noted that the move would give more "transparency" to the operations of Yahoo’s core businesses, and analysts believed that implied Yahoo would be selling itself off bit by bit.

So why would Verizon be interested? The company's massive user base and mobile video ads would likely bring in quite a lot of revenue.

In April 2015, the Interactive Advertising Bureau found that "more than two-thirds (68 percent) of marketers and agency executives expect to see their digital video ad budgets increase in the next 12 months." In short, even if Verizon doesn’t dominate the crowded online video scene, it stands to do well.

"They don’t have to crush the competition. The market is so big—even if you get a small piece, you still make money," Roger Entner of Recon Analytics told Ars.