Verizon sells Yahoo and AOL to Apollo for $5 billion
Yahoo and AOL are changing hands again.
Verizon, which purchased AOL in 2015 and Yahoo in 2017, is now selling them to private equity company Apollo Global Management for $5 billion.
Verizon merged AOL and Yahoo into a subsidiary called Oath in 2017, eventually rebranding it into Verizon Media. The new company, in which Verizon will retain a 10 percent stake, will be rebranded as just “Yahoo.”
Verizon originally acquired AOL for $4.4 billion and Yahoo for $4.5 billion, which makes this a pretty bad deal, overall, for Verizon. However, Verizon Media did do well in 2020, posting strong revenue growth, which continued into 2021.
“Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous (…) During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home,” Verizon CEO Hans Vestberg said in a statement.
For the last two years, Verizon Media was helmed by Guru Gorwappan, and he will continue to lead the newly formed company.
If Verizon Media was doing so well recently, why is Verizon selling it now? The answer is probably that Verizon isn’t all that interesting in having a media business anymore. This was quite apparent from the fact that Verizon was already selling off its media properties, including Tumblr and Huffpost, in the last couple of years.
According to the Wall Street Journal, which reported on the possible acquisition last week, Verizon has recently been focused on partnering with streaming video services such as Disney+ and Hulu. Furthermore, the deal allows to company to raise the cash it needs to continue expanding its core business, which includes billions in expenditures on 5G spectrum licenses as well as network equipment.