Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

Yahoo shareholders are crossing their fingers for the highest possible price in the sale of their troubled company. People who simply want a healthy and competitive internet economy should be rooting for Verizon to nab this admittedly dubious prize. 

Consumers and the media and marketing worlds deserve a credible counterweight to Google and Facebook in online and mobile advertising. The two companies now gobble 43 percent of the $187 billion spent globally on digital ads, eMarketer estimates. On the mobile gadgets that are increasingly the world's primary computers, the Facebook-Google power couple collect more than half of all mobile ad dollars.

No Yahoos Here
Yahoo collects about 3.4% of all U.S. spending on digital ads, about a third of its advertising market share in 2009. At the same time, Facebook has overtaken Yahoo as an advertising powerhouse.
Source: eMarketer estimates
Note: Figures reflect net revenue, excluding payments to ad partners

This pole position gives Google and Facebook power to shape the future -- what news people see and read, how much of digital communication will tilt from text to video, how products are pitched and much more.

That's where Verizon hopes to break in. The company has been buying up internet and advertising technology companies, including AOL, and presenting itself as the best bet to break GoogBook's lock on advertising. The ownership of both Yahoo and AOL would give Verizon control of the third and sixth most-popular web properties in the U.S. Those web pages provide more digital real estate for commercials that Verizon can sell with its own mobile-and-video ad technology. Yahoo owns some useful digital-ad tech, too, with Flurry and BrightRoll

The odds aren't great for challengers to Google and Facebook. But it would be healthier to have a broader set of arbiters for our digital lives, and at this point Verizon plus Yahoo is the best shot at a No. 3 player to keep the superpowers in check.

No matter who Yahoo's new owners are -- and a sale does seem the likeliest route at this point -- it will be a sad marker of how much has gone wrong recently for the web pioneer.

Since 2012, net revenue has dipped from $4.47 billion to $4.1 billion last year despite Yahoo CEO Marissa Mayer's pledge to increase sales. Free cash flow cratered from $3.8 billion in 2012 to $345 million last year after adjusting for stock sales of Yahoo's Alibaba investment. Yahoo this year will grab about $3 out of every $100 spent on digital ads in the U.S., about one-third of its advertising market share in 2009, according to eMarketer.

Mayer says the dwindling revenue and lost market share are temporary as Yahoo weans itself from out-of-favor types of advertising like web banner ads. She's right to push the company to diversify, but her time is up and her credibility as Yahoo's savior has eroded.

Not Dead Yet
Yahoo is a faded internet star, but its websites and mobile apps still draw more than 200 million Americans each month
Source: comScore, February 2016 data

It's too bad, because Mayer and the board that hired her four years ago had the laudable ambition to remake Yahoo after many years of dysfunction. They didn't want to slash and burn their way to success and instead sought to make Yahoo relevant by investing in technology. The company spent too much on the wrong things, and it seems Mayer overestimated her mandate to invest without a clear payoff. But it's also clear she did all this with the best of intentions to return Yahoo to the good old days. 

Few of Yahoo's potential new owners have publicly articulated their plans, but two divergent paths are most likely under new management. The first, in the hands of a private equity firm like TPG, would be to milk Yahoo for cash, with sweeping job cuts and asset sales to return the company to its cash-generating ways. The other path, under Verizon's umbrella, would be yet another attempt to rebuild Yahoo to advertising glory.

Undertaking another Yahoo turnaround would be a high-risk strategy for Verizon's AOL unit, led by Mayer's former Google colleague Tim Armstrong. It's debatable whether this move would be good for Verizon shareholders. Armstrong is not a technologist who can rub elbows with app developers as Mayer did. That may be a good thing. Absorbing and fixing Yahoo would take coaxing and hand-holding skills that play to Armstrong's strengths. Yahoo would be a blip on Verizon's $130 billion in yearly sales, which means Yahoo could flail for a while without much spotlight.

It is ironic that Verizon is trying to bust up the Google-Facebook duopoly in the digital advertising industry, while Verizon has happily reaped the benefits of its own telecom duopoly with AT&T. But just as T-Mobile created a third alternative in mobile phone market, and kept Verizon on its toes, Verizon could do the same thing in advertising. Yahoo will never return to its 1990s glory days. But for the benefit of our digital lives, Yahoo deserves another shot at rebirth in Verizon's stable.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Shira Ovide in New York at

To contact the editor responsible for this story:
Daniel Niemi at