Verizon buys Yahoo for $4.83B, shutting out Gilbert
Verizon is buying Yahoo for $4.83 billion, marking the end of an era for a company that once defined the internet.
It also means Dan Gilbert’s bid for the struggling internet pioneer has come up short. Gilbert, the founder of Detroit-based Quicken Loans Inc., had teamed up with fellow billionaire and legendary investor Warren Buffett for the Yahoo bid.
It is the second time in as many years that Verizon has snapped up the remnants of a fallen internet star as it broadens its digital reach. The nation’s largest wireless carrier paid $4.4 billion for AOL Inc. last year. Yahoo will be rolled into Verizon’s AOL operations, the company announced Monday.
Gilbert never fully stated his ambitions for Yahoo, but when asked about it in May, he mentioned his desire to make downtown Detroit one of the “fintech capitals of the world.”
“Fintech” is a term for companies that apply computer and internet technology to the financial industry. The fintech sector is a booming, multi-billion dollar field that includes everything from start-ups who try to come up with technological innovations for a wide range of of consumer and business-to-business financial services, to larger more established companies who seek to use technology to make financial systems more efficient.
Gilbert often mentions the city’s “technology-centric growth” as crucial to Detroit’s future and he’s already invested heavily in tech companies and lured many start-ups downtown
“Dan Gilbert always talks of building a high-knowledge, high-wage core” in Detroit, said Lou Glazer, president and co-founder of Michigan Future Inc., a nonprofit that promotes Michigan’s role in the knowledge economy, in a recent interview with The Detroit News. “That vision goes beyond Yahoo, but in his investments in start-ups and workers he’s bringing downtown.”
Quicken Loans is the nation’s largest online mortgage lender in the nation. It is also the nation’s leading Veteran Affairs lender and the largest FHA lender. Quicken recently launched a new website called “Rocket Mortgage” that allows users to refinance or purchase a home in as little as eight minutes.
Gilbert is a major force in downtown Detroit. Entities connected to Gilbert and his Bedrock real estate have invested $2.2 billion since 2010 in buying and renovating more than 90 Detroit properties mainly in the city’s downtown. The properties range from skyscrapers to parking garages and smaller buildings. He has long talked of creating a tech and entertainment hub in the Motor City. He owns other ventures from casinos to media publications to the NBA’s Cleveland Cavaliers.
Gilbert and Bedrock have already recruited a number of entrepreneurial startups and other tech firms downtown, including Google for Entrepreneurs, Microsoft Ventures, Twitter, as well as start ups Detroit Labs, StockX and numerous others. He recently helped launch Rocket Fiber, a fiber-optic Internet service initially targeting the central business district downtown, Midtown and Corktown.
Here’s what Gilbert had to say last month when International Bancard, a technology-focused credit card processing company, announced plans to relocate its headquarters from Clawson to 1505 Woodward Avenue in downtown, a Bedrock property.
“International Bancard is making a meaningful, long-term commitment to Detroit which will be impactful for the city’s technology-centric growth trajectory,” Gilbert said last month. “This is another great example of an innovative, tech-focused company moving its headquarters downtown and further evidence Detroit is quickly moving towards becoming one of the fintech centers of the country.”
The Associated Press contributed to this story
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