Shares of Yahoo whipsawed Thursday on news that Verizon would move forward with a bid for the tech giant. The stock traded down marginally on Friday.
Gabelli, who owns shares of Verizon and Yahoo, said the marriage makes sense following Verizon's $4.4 billion purchase of AOL last year. Verizon could likely do a deal to sell off Yahoo Japan, he said.
"This is pretty simple. It's basically Investment Banking 101," he told CNBC's "Fast Money: Halftime Report."
Yahoo has pushed back the deadline for bids for the business until April 18, Re/code reported. AT&T, Time Inc, and Google-parent Alphabet, as well as private equity firms TPG and Bain, are also reportedly interested in Yahoo's assets.