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What’s in a name? Yahoo’s Altaba expected to help the brand break free from recent troubles

In the latest chapter of Verizon's acquisition of Yahoo, the latter announced Monday that it will change the name of its stake in Alibaba and other holdings to Altaba, effective as soon as the Verizon deal closes.

The assets using the name Yahoo – such as email, sports and finance content – will come under the Verizon umbrella once the $4.8 billion sale goes through. That means the remaining parts of the business, which will be publicly traded and are currently known as RemainCo, can no longer use the name Yahoo. These include 15 percent of Chinese e-commerce company Alibaba and 35.5 percent of Yahoo Japan.

The name Altaba is pretty similar to Alibaba, and is thought to be a combination of the words "alternative" and "Alibaba."


Workers use a crane to move a section of a Yahoo! billboard on December 21, 2011 in San Francisco, California. Yahoo's iconic retro-style billboard was taken down after 12 years of greeting visitors to San Francisco.
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Workers use a crane to move a section of a Yahoo! billboard on December 21, 2011 in San Francisco, California. Yahoo's iconic retro-style billboard was taken down after 12 years of greeting visitors to San Francisco.

Experts say the renamed company could be a way for Yahoo to shake off its recent problems, with two data breaches affecting a total of 1.5 billion user accounts in 2016, as well as being a requirement of the deal.

"For Verizon, it is something that they probably expect to see before their deal is approved, so they can maximize their investment in the Yahoo brand," Sotirios Paroutis, associate professor of strategic management at the U.K.'s Warwick Business School, told CNBC by email.

"For Altaba, it signals a refocusing on the Asian-based assets, but it can also be seen as a legal and tax-efficient way to deal with the break-up of Yahoo," he added.

"Anchoring the new name on the valuable link with Alibaba makes sense, as it is a fresh break from Yahoo's troubled recent past. If true that the first part of the name is about 'alternative,' it remains to be seen what is alternative about the new firm and how its strategy will relate to Alibaba."

For Jon Wilkins, executive chairman of agency Karmarama, the name Altaba is quite corporate. "Brands should focus on the impact on the user, rather than in this incidence (where) it looks like a corporate affairs decision, as opposed to a decision based on the user," he told CNBC by phone.

Renaming a brand can be risky, Wilkins added, citing the U.K.'s 500 year-old postal service Royal Mail, which rebranded as Consignia in 2001, only to return to its original name 15 months later. "They wanted to demonstrate that it was a dynamic, forward-facing business, (but) the CEO (John Roberts) left and it went back to the good old-fashioned Royal Mail."

But the Yahoo brand remains a strong one, according to Tim Armstrong, CEO of AOL, which is owned by Verizon. Armstrong, who helped lead the bid for Yahoo, told CNBC in July 2016 that the acquisition of Yahoo would complement Verizon's "house of brands" approach and help it compete against the likes of Facebook and Google.

"Trying to do what Google and Facebook do is not a good strategy ... We're the up-and-comer. We're going to compete for the gold medal in the future. We have to have a differentiated performance," he said.

Yahoo was founded by Stanford students Jerry Yang and David Filo, who launched "Jerry and Dave's Guide to the World Wide Web" in 1994, which became Yahoo in 1995. Filo is to resign from the Yahoo board, along with CEO Marissa Mayer, according to an SEC 8-K filing on Monday. Mayer will reportedly join Verizon once the deal closes but there has been no official confirmation of this.

Yahoo declined to comment when contacted by CNBC,

Clarification: This story has been updated to reflect that CEO Marissa Mayer is reportedly joining Verizon after the deal closes.


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