Verizon Communications Inc. is selling its media business, Verizon Media including Yahoo and AOL, to Apollo Global Management Inc. for $5 billion. Yahoo and AOL in addition to other internet brands under Verizon Media have been unsuccessful in the media and advertising world, according to Reuters. Therefore, Verizon decided to get rid of its media business and focus its resources on developing 5G instead.
Verizon Media includes many internet brands but the two most prominent ones were Yahoo and AOL. However, none of these brands could longer compete in the internet advertising space which is dominated by Facebook, Google, and Amazon. Additionally, Verizon’s new chief executive officer, Hans Vesterg, prioritized strengthening the company’s telecom network.
Apollo private equity is paying $4.25 billion in cash for 90% of the media assets while Verizon Communications maintains 10% stock and $750 million additional preferred stock. Verizon Media will be called “Yahoo” when Apollo claims ownership. The private equity firm plans to grow key assets such as Yahoo Finance and Yahoo sports through new business initiatives like subscriptions.
Verizon Media’s portfolio includes brands such as Techcrunch, Makers, Ryot and Flurry which are also included in the acquisition. The media business reported revenue of $1.9 billion in the first quarter of 2021, up by 10.4% year-on-year.
References:
1) Gottfried, M., & FitzGerald, D. (2021, May 03). Verizon to sell Yahoo, AOL for $5 billion to Apollo. Retrieved May 05, 2021, from https://www.wsj.com/articles/apollo-buys-yahoo-aol-from-verizon-for-5-billion-11620044945?page=1
2) Mathews, E., & Hu, K. (2021, May 03). Verizon to Offload Yahoo, AOL for $5 billion. Retrieved May 05, 2021, from https://www.reuters.com/technology/apollo-acquire-verizons-media-assets-5-bln-2021-05-03/
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