Yahoo has agreed to sell its core assets to telecom giant Verizon for $4.8bn, ending a 20-year run by the internet pioneer as an independent company.
Verizon chief executive Lowell McAdam announced on Monday that Yahoo would be integrated into its recently acquired AOL unit to create "a top global mobile media company, and help to accelerate our revenue stream in digital advertising".
The acquisition, expected to close in early 2017, will exclude Yahoo's cash, certain patent holdings, and its big share in China's Alibaba Group and stake in Yahoo Japan.
The deal will leave Yahoo as a separate investment company that will change its name after the transaction.
Facebook to add end-to-end encryption to Messenger app
"Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL," Marissa Mayer, CEO of Yahoo, said in a statement.
She added that the deal separates the core Yahoo business from its Asian asset equity stakes, and "is an important step in our plan to unlock shareholder value for Yahoo".
Verizon won the Yahoo bidding after a five-month auction.
Yahoo Incorporation is parting with its email service and websites devoted to news, finance and sports in addition to its advertising tools under pressure from shareholders fed up with a steep downturn in the company's revenue during the past eight years.
The deal comes with Yahoo, a one-time leader in the online space, struggling to keep up with rivals such as Google and Facebook.