Apollo Global Management, a private equity company, has purchased Verizon’s media division for $5 billion, the two companies reported Monday.
Verizon Media, which contains properties from AOL and Yahoo’s former internet empires, will be rebranded as “Yahoo,” according to the announcement. Verizon stated that it would retain a 10% stake in the company.
TechCrunch, Yahoo Finance, and Engadget are among the online news outlets included in the deal. Apollo and Verizon have stated that the transaction is expected to close in the second half of 2021.
Verizon is reducing its losses on its media companies through the agreement, which values the businesses considerably less than Verizon charged only a few years earlier. Verizon acquired AOL in 2015 for $4.4 billion, and Yahoo in 2017 for $4.5 billion.
Verizon will receive $4.25 billion in cash in addition to its 10% interest in Yahoo.
A year ago, the COVID-19 pandemic wreaked havoc on the advertising industry, sending revenue for advertising-supported online publications into a tailspin. Verizon Media CEO Guru Gowrappan touted the company’s recent good rebound from last year’s lows in Monday’s announcement. Apollo, he added, would assist the organization in growing its “full stack digital advertising network.”
“We are strong believers in Yahoo’s growth prospects and the macroeconomic tailwinds driving growth in digital media, advertising technology, and consumer internet platforms,” said David Sambur, Apollo’s co-head of private equity. “Apollo has a long history of investing in technology and media businesses, and we look forward to using that expertise to ensure Yahoo’s continued success.”
Verizon has taken another step toward leaving the media business with this contract. Verizon sold HuffPost to BuzzFeed last year and recently divested or shut down additional assets, including Tumblr and Yahoo Answers.
Verizon is expected to concentrate on its core wireless networks and other internet provider businesses after its departure from television.
The deal reflects AOL and Yahoo’s inability to adapt and prosper as the consumer internet grew. The two firms were pioneers of the consumer internet, but have since become the newest media companies to be acquired by private equity.