Verizon Communications Inc. agreed to sell its media division to Apollo Global Management Inc. for $5 billion, a move that will get forgo the once-dominant online brands like AOL and Yahoo.
The unit will be known as Yahoo after the close of the transaction, which is expected in the second half of this year, Verizon said in a statement Monday. Guru Gowrappan will remain the chief executive officer of the media group. Verizon will keep a 10 percent stake in the business, it said, confirming an earlier Bloomberg News report.
With the sale, Verizon is unloading the remnants of an ambitious but distracting foray into online advertising. Last year, the telecom giant agreed to sell the HuffPost online news service to BuzzFeed Inc., and in 2019 it sold the blogging platform Tumblr.
The US-based telecommunications company’s main priority is now its wireless business and the construction of a multibillion-dollar network for advanced 5G services.
Verizon’s investments in online advertising never really paid off. The company acquired AOL for $4.4 billion in 2015. Tim Armstrong, head of AOL, said at the time he wanted to build a “house of brands” at Verizon under a division dubbed Oath. In 2017, the company bought Yahoo!’s internet properties for about $4.5 billion, betting its 1 billion-plus users would be a fertile audience for online ads.
But in 2018, after Hans Vestberg took over as Verizon’s CEO, the company wrote off more than $4 billion of its media holdings, or roughly half the value of those businesses, and renamed the division Verizon Media Group.
Both AOL and Yahoo lost traction — and lofty market valuations — as internet users shifted to newer platforms such as Google and Facebook.
“We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands,” said Reed Rayman, private equity partner at Apollo.
“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 added, “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.”
