Verizon Communications on Monday announced plans to acquire Yahoo for $4.8 billion in cash, ending months of uncertainty after Marissa Mayer's battered internet giant company said it would review strategic alternatives. Share prices of both companies initially moved slightly higher in premarket trading after the announcement, but they turned lower. By early afternoon, Yahoo was down 2.7 percent. (For the latest prices, click here for Yahoo and here for Verizon.) Marni Walden, Verizon president of product innovation and new businesses, said on CNBC's "Squawk Box" that the deal included Yahoo's core operating business and patents.

The acquisition will help the telecom company in its efforts to build a media company, she said. "Yahoo gives us scale and that's what's most critical here. We go from being in the millions of audience to the billions. We want to compete and that's the place that we need to be, so we're very pleased with where we are today," Walden said. The transaction is seen boosting Verizon's AOL internet business, which the company acquired last year for $4.4 billion, by giving it access to Yahoo's advertising technology tools, as well as other assets such as search, mail, messenger and real estate.

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Some analysts have placed synergies at roughly $1 billion, but AOL CEO Tim Armstrong said that was not the main focus of the Yahoo deal. "The strategy behind the deal is to really go after mobile and video and a lot of the global services — the services that AOL has and Yahoo has — at scale," he told "Squawk Box." Facebook and Google dominate the U.S. digital advertising markets. Microsoft, Yahoo and AOL lag far behind and have lost market share. Together, AOL and Yahoo would have about 5 percent of the digital ad market. But on Monday, Walden said she expects AOL and Yahoo to break out of their combined single-digit market share. "We're going to get to double digits," she said. In a statement, Verizon said it expects the deal to close in the first quarter of 2017, subject to approval of Yahoo shareholders and regulators.

The deal would mark the end of Yahoo as an operating company, leaving it only as the owner of a 35.5 percent stake in Yahoo Japan, as well as its 15 percent interest in Chinese e-commerce company Alibaba. Yahoo will also retain its cash, convertible notes, certain minority investments, and a noncore portfolio of patents called Excalibur. The Excalibur portfolio includes some of Yahoo's oldest patents related to paid search, search optimization and advertising, according to MCAM, which conducts analysis and valuation of intangible property. "While there is some advertising IP in the portfolio that Verizon is buying, they are mostly getting social networking, mobile, fantasy sports, and some messaging and email," MCAM said in a statement.