Verizon has confirmed that it will be the new owner of internet company Yahoo! – and by extension photosharing and hosting website Flickr.

Yahoo! confirmed that the transaction will be worth $4.8 billion in cash, and it will be subject to customary closing adjustments. That is a large chunk of change, and it makes it even scarier to think that the purchase will be debt-free.

Once the deal is approved and has gone through all the regulatory steps, Yahoo! will be sucked into Verizon, and will be meshed together with AOL – reporting to Marni Walden, EVP and President of the Product Innovation and New Businesses organisation at Verizon.

“Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL. The sale of our operating business, which effectively separates our Asian asset equity stakes, is an important step in our plan to unlock shareholder value for Yahoo. This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social,” said Marissa Mayer, CEO of Yahoo.

Tim Armstrong, CEO of AOL explained that by acquiring Yahoo!, it will be able to bring the company up to its full potential.

“We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth. Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers,” he said in a statement.

While the deal was announced today, it is only expected to be closed in the first quarter of next year.

“Until the closing, Yahoo will continue to operate independently, offering and improving its own products and services for users, advertisers, developers and partners,” it explained.

[Image – CC by 2.0/emeraldimp]