Yahoo CEO, Marissa Mayer, described the acquisition as "an important step in unlocking shareholder value for Yahoo".

“Yahoo and AOL popularized the Internet, email, search and real-time media. It's poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile," she added.

Yahoo reportedly has monthly active users of around 1 billion with mobile users estimated at 600 million.

The company has been struggling in the face of stiff competition from rival companies such as Google and Facebook.