Telecom giant Verizon is nearing a deal to sell its assets Yahoo! And AOL to a private equity firm. Verizon veered away from its core telecoms business to dabble into online advertising, but with disastrous results. Recently, the firm sold off HuffPost and its blog site Tumblr.
By jettisoning Yahoo! and AOL, Verizon pulled the plug on its media ambitions and will instead concentrate on what it does best.
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Verizon Nearing a Deal to Sell Yahoo! and AOL
Verizon is reportedly about to close on a deal to unload both Yahoo! And AOL to private equity firm Apollo Global Management. The deal, valued between $$ to $5 billion, will also include Verizon’s advertising technology business.
Even with the agreement to sell, Verizon expects to maintain a stake in the media arm. The sources for the news cautioned that as talks remain underward, they can still fall apart.
However, it remains unclear what Apollo plans to do with the assets. In fairness, both Yahoo! and AOL still generate revenue. Verizon’s media division recorded $1.9 billion in sales during the first quarter this year, which is a 10% gain from last year.
In particular, Yahoo! still operates the popular Yahoo! Sports fantasy sports site while AOL manages the popular tech online site TechCrunch.
Yahoo! and AOL In Their Heyday
The buyout is the latest chapter in the long history of both Yahoo! and AOL, two of the internet’s earliest high flyers. Before Google, Yahoo! used to lord it over as everybody’s default search engine.
As the front page of the internet, it offered a portal into the many interests, channels, and groups spawned by the World Wide Web.
Meanwhile, America Online or AOL provided a majority of Americans a gateway to the internet. Eventually, both companies gave up market share and customers to aggressive and agile startups.
Verizon turned to the media business in 2015 when it bought AOL for $4.4 billion. Lowell McAdam, the Verizon CEO at the time, said Oath will provide a “cross-screen connection” that delivers a “premium experience” for advertisers, consumers, and creators.
Two years later, AOL head Tim Armstrong convinced Verizon to buy Yahoo! for $4.5 billion. Soon afterward, the company merged the two purchases into their media arm, Verizon Oath.
This started a buying spree of about 50 content sites that flourished under the Oath umbrella. Within two years, Verizon renamed Oath to Verizon Media Group. Now, with the abundance of original content in social media apps such as Facebook, YouTube, Twitter, and others, Yahoo! and AOL found themselves less relevant.
Apollo On A Buying Spree
The buyer, Apollo Global Management, is currently embarking on an aggressive deal-making spree. Apollo helped finance the 2019 merger of the USA Today parent Gannett and the local newspaper chain New Media Investment Group.
As a result, the merger created Gannett, the largest US newspaper publisher. The company also owns Cox Media Group’s television and radio stations Cox Media Group.
Apollo’s fingers in is a number of current deals as well. It recently announced its plans to acquire crafts retailer Michaels and the Venetian resort in Las Vegas.
Meanwhile, Apollo management also sought to clean the house. Cofounder Leon Black announced last month that he will step down from Apollo. News reports revealed that Black paid more than $150 million to the notorious Jeffrey Epstein.
Watch the CNBC TV video report on Verizon exploring the sale of media assets:
Do you remember the older days of the internet when you had to connect via AOL and then search for content using Yahoo!? Do you miss the earlier days of the internet? What do you think about today’s version of the worldwide web?
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