Verizon to sell its Yahoo, AOL unit to Apollo in $5-billion deal
AOL and Yahoo are being sold again, this time to a private equity firm.
Verizon will sell Verizon Media, which consists of the pioneering tech platforms, to Apollo Global Management in a $5-billion deal.
Verizon said Monday that it would keep a 10% stake in the new company, which will be called Yahoo.
Yahoo at the end of the last century was the face of the internet, preceding behemoth tech platforms such as Google. And AOL was the portal, bringing almost everyone who logged on during the internet’s earliest days.
Verizon spent about $9 billion buying AOL and Yahoo over two years starting in 2015, hoping to jump-start a digital media business that would compete with Google and Facebook. It didn’t work — AOL and Yahoo were already fading even then — as Google, Facebook and, increasingly, Amazon dominate the U.S. digital ad market.
The year after buying Yahoo, Verizon wrote down the value of the combined operation, called Oath, by roughly the value of the $4.5 billion it had spent on Yahoo.
New court documents show Facebook managers raised alarms about the way a key metric was misleading advertisers.
Verizon has been shedding media assets as it refocuses on wireless, spending billions on licensing the airwaves needed for the next generation of faster mobile service, called 5G. It sold blogging site Tumblr in 2019 and HuffPost to BuzzFeed late last year. The digital media sector in recent years has been consolidating as companies seek profitability.
The properties Verizon is selling include Yahoo Finance, Yahoo Mail and the tech blogs Engadget and TechCrunch. Despite its difficulty competing with tech giants for ad dollars, leading to cost cuts and layoffs, Verizon Media’s revenue rose 10% in the most recent quarter from the year before, to $1.9 billion.
Financial firms like Apollo have played an increasingly prominent role in traditional media as well in recent years, buying up newspaper chains and slashing costs.
As part of the new sale announced Monday, Verizon will receive $4.25 billion in cash, preferred interests of $750 million and the 10% minority stake. The transaction includes the assets of Verizon Media, among them brands and businesses such as Yahoo and AOL.
The deal is expected to close in the second half of the year.
Shares of Verizon Communications, based in New York, rose less than 1% Monday.
