American wireless network operator, Verizon, on Monday, announced the sales of faded web service providers Yahoo and AOL to a private equity firm for $5 billion, ending the media ambitions of the telecoms giant.
The transaction with Apollo Global Management has the entire Verizon Media unit and the advertising tech operations of the two brands as part of the deal.
According to a statement issued by Verizon, it will retain a 10% stake in the company which will continue to be led by its Chief Executive, Guru Gowarappan.
The sale will see online media brands under the former Yahoo and AOL umbrellas like TechCrunch, Yahoo Finance and Engadget go to Apollo. Verizon bought AOL for $4.4 billion in 2015 and it bought Yahoo for $4.5 billion in 2017.
There had been increasing evidence recently that Verizon wanted to sell off its media properties and instead focus on its wireless networks and other internet provider businesses.
Private equity partner at Apollo, Reed Rayman, said, “We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands. We have enormous respect and admiration for the great work and progress that the entire organization has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo’s growth in its next chapter.”
Apollo’s David Sambur also said, “We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms.”
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What you should know
- It can be recalled that Verizon, in 2017, purchased Yahoo for about $4.5 billion, ending the run for one of the storied brands of the early internet. It later merged Yahoo into its division with AOL, another star of the early internet era, which Verizon acquired in 2015.
- Both AOL and Yahoo lost traction and lofty market valuations as internet users shifted to newer platforms such as Google and Facebook.
- The purchase was meant to give Verizon a pathway into mobile, with the goal of using AOL’s advertising technology to sell ads against digital content. Verizon doubled down on that strategy in 2017 with its acquisition of Yahoo, which it combined with AOL under the umbrella Oath.
- The $5 billion sales by Verizon is about half the price it bought the 2 firms a few years back.