Verizon to sell AOL and Yahoo businesses to Apollo for $5 billion
Verizon must be a magician, because they just made half of their AOL and Yahoo investment disappear. Find out more about the deal to sell their media division to Apollo here.
Verizon, AT&T, Comcast, and several other carriers have made sizeable investments in the media landscape over the years, with a variety of business outcomes. It appears that the road ahead for Yahoo and AOL will no longer be with parent company Verizon, as a $5 billion deal to sell the media assets to Apollo Global Management has been announced. This deal values the combined entities at a significant discount to the $8.9 billion price Verizon paid for and is a cautionary tale to companies attempting to enter the media space.
Verizon has been rumored to be shopping around their media asset portfolio over the past few years, successfully dumping HuffPost to BuzzFeed in 2020. The company has also receently sold off Tumblr and announced the shuttering of Yahoo Answers. Before they gave up on integrating media content into their services business model, the company rebranded Yahoo and AOL as Oath in 2017 for some reason. Oath never gained traction, and was ultimately rebranded again in 2018 as Verizon Media Group.
Today's announcement of the sale of Verizon Media Group signals a material shift in philosophy at Verizon. Competitor AT&T is still investing in media with WarnerMedia powering their HBO Max subscription service. Comcast has also recently invested more in media with NBCUniversal powering its Peacock streaming service. Verizon's purchases were not as easily monetizeable as most of Yahoo and AOL's media assets were websites like TechCrunch, Engadget, Yahoo Finance, and Fantasy Football.
Today's asset sale adds insult to injury for Verizon (VZ), as they were never able to turn a profit on Yahoo and AOL, and they are selling them at close to a $4 billion loss. Apollo Management Group and Verizon are set to close the deal by the second half of 2021. Verizon will receive $4.25 billion in cash as well as a 10% stake in the new Verizon Media Group, which will be rebranded to just Yahoo.
The fall from grace of AOL and Yahoo is certainly a cautionary tale for booming social media companies today. While things certainly appear to be peachy keen for Facebook, Twitter, and Snapchat these days with their multibillion dollar valuations, the Internet is a fickle beast and can drop your platform from relevancy just as fast.
Verizon Media Group generated revenue of $1.9 billion during Q1 2021, so hopefully the renewed effort by Apollo Management Group to turn around these properties will work this time. Otherwise, we will be sure to report the next time that AOL and Yahoo get sold. Again.
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replyCaptain Business posted a new article, Verizon to sell AOL and Yahoo businesses to Apollo for $5 billion
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Verizon sells off AOL and Yahoo to a private equity firm for about $5B total, when it had paid $9B combined for both. What a deal!
https://www.theverge.com/2021/5/3/22416854/aol-yahoo-sale-apollo-venetian-hotel-verizon-
Why do people keep buying Yahoo
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If I'm reading this really obtuse PR right, altbaba was sold for just under $14B. So uh, Verizon wins, I guess.
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Because Marissa Mayer turned it around, duh.
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More like she heeled it down the drain.
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She only got $23 million in severance, and $230 million in stock. I hope she's doing ok.
https://money.cnn.com/2017/06/13/investing/yahoo-marissa-mayer-severance-stock-verizon/index.html
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Guess Verizon needed a tax write off.
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I am vaguely ashamed to admit I still have a yahoo email I check regularly. Fantasy Football and various old accounts still point to it. :|
I did recently get it all properly forwarded to my gmail so that's a win. -
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I visit Yahoo daily. It's just a news aggregator and perfect for me because I get tired of clicking through paywalls or whining about adblock. Once upon a time it was a cool place to comment on sports but everything gets political now. I have 2 long time running Fantasy leagues that use them as well. They also are one of my alternate email addresses.
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I still use a Verizon email account that was transferred during the aol merger. I hope they don’t kill it but who knows. Had this damn email for 15 years lol
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I met Tim Armstrong a few times in my line of work. IMHO, he's what happens when you give a guy who looks like he's supposed to be the CEO a little bit of success around a bunch of nerds. Big tall Mr. Success Good Looking Man with a great smile and a great handshake. He rode the coat tails of a couple super smart google engineers straight into the AOL gig and it was obvious as hell that he was winging it right from the get go. Also worked with some of his posse he brought in at AOL, who were all like good dudes that weren't very good at their job and he protected them fiercely. Any time he did an acquisition he would refuse to acknowledge it wasn't working etc, you'd get fired for not buying into Team Armstrong etc.
Him and Marissa Mayer both were like the dynamic duo of people who got lucky and refused to acknowledge they got lucky. I bet both of them are rich as hell still, but there's no denying they merely moved on from their great luck at Google to hold together dumb companies for a few years.-
Poor dude had to sell one of his houses :(
https://www.realtor.com/news/celebrity-real-estate/tim-armstrong-selling-waterfront-mansion-in-connecticut/
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Private Equity Firm Heartbroken After Realizing There No AOL Employees Left To Fire
https://www.theonion.com/private-equity-firm-heartbroken-after-realizing-there-n-1846813478
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