Loudoun’s largest private-sector employer is getting bigger—and making a bigger investment in cyberspace—but that doesn’t mean more jobs are coming.
Verizon announced Monday a $4.83 billion acquisition of Yahoo Inc. The company said it plans to merge the operations of that one-time cutting edge Internet giant (once valued at $125 billion) with those of another—AOL, which it bought last year for $4.4 billion. The transaction is expected to close in late 2016 or early 2017.
Yahoo is based in Sunnyvale, CA, and a key question for Loudoun leaders is whether the deal will result in more tech jobs heading to the West Coast, or even to New York, where Verizon and AOL are headquartered. That has been a disturbing trend, a regional economist warned recently.
Terry Clower, of George Mason University’s Center for Regional Analysis, was a speaker during a Loudoun County Chamber of Commerce’s economic forum earlier this month.
“You’ve been losing the information jobs since 2001. It’s been a steady decline,” Clower said. “We lost the mojo in this region which we had with AOL and those guys. We lost our mojo to California.”
He said an important element in creating a more diverse regional economy—one less dependent on federal spending—was to keep the small businesses that are created by Northern Virginian’s prolific entrepreneurs here even after the startups are acquired by larger firms.
Statements from Verizon and AOL leaders indicated that the future structure of the company’s operations hasn’t been laid out.
“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers,” said Lowell McAdam, Verizon’s CEO and chairman, in a statement. “The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”
AOL CEO Tim Armstrong said the deal could catapult the company back to the top of the digital media industry.
“The deal will get major coverage and you will read many theories on the potential outcomes of the deal—we are working in an important space on important things,” Armstrong wrote in a memo to employees. “We won’t do everything perfectly and that is not our goal. Our goal is to take a growth mindset to this deal and to our ability to invent and learn. We have clear goals and a clear mission and we will figure out how to reach those goals by being differentiated, creative, taking risks, and working really hard.”
Verizon has stated that Marni M. Walden, executive vice president and president of Product Innovation and New Businesses, will oversee AOL and Yahoo during the merger.