"Yahoo was a wasting asset," Cramer said Monday on "Squawk on the Street." "It was truly something that lost its way."
Verizon will integrate Yahoo with the AOL unit. The companies are still ironing out who will be in leadership after the deal is closed.
Cramer said Armstrong has the ability to make Yahoo "a rival" to other companies and a strong competitor. "The whole web needs a portal. He can put everybody together who's not Google and not Facebook," Cramer said.
"I'm very excited about this because maybe it'll be back like the old days in '98 and '99 when Yahoo was the leader," Cramer said.
Disclosure: CNBC has a content-sharing partnership with Yahoo's finance site.