Verizon will sell its media conglomerate to private equity firm Apollo Global Management for $ 5 billion, the companies announced on Monday. The sale allows Verizon to offload assets from the former Internet empires of AOL and Yahoo.
Verizon will hold a 10% stake in the company and it will only be rebranded to Yahoo.
The sale will see online media brands under former Yahoo and AOL umbrellas such as TechCrunch, Yahoo Finance and Engdg, which go to Apollo at a much lower valuation than a few years ago. Verizon bought AOL for $ 4.4 billion in 2015 and Yahoo two years later for $ 4.5 billion.
Verizon will receive $ 4.25 billion in cash from the sale with its 10% stake in the company. Verizon and Apollo said they expected the transaction to close in the second half of 2021.
Recently there has been increasing evidence that Verizon wanted to sell its media properties and instead focus on its wireless networks and other Internet provider businesses. Last year, Verizon sold HuffPost to BuzzFeed. It recently sold or closed other media assets such as Tumblr and Yahoo Answers.
Earlier, Verizon’s original vision was to transform Yahoo and AOL assets into online media behemoths that could take over Google and Facebook’s dominance in online advertising. Under former AOL CEO Tim Armstrong, the Yahoo and AOL brands were converted into an oath in a new online media division within Wraith.
But the Pledge Project largely failed to gain momentum, and Armstrong left the company in 2018. The pledge re-emerged as a Verizon Media Group again in November 2018 and was run by Guru Gowarappan. Gowrappan will continue to lead Yahoo under Apollo.
With sales from Yahoo and AOL, Verizon indicated that it is no longer interested in the media, unlike its rivals. AT&T is still trying to develop WarnerMedia as a streaming competitor for Netflix and Disney, even as it struggles with a load of debt from its media acquisitions. Comcast, another internet provider, is still with the media business as well as NBCUniversal.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
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