Notably, Verizon is on the verge of selling the media group to the private equity firm Apollo Global Management for $5 billion. This was announced by the companies on Monday. The sale permits Verizon for offloading properties from the former internet empires of AOL and Yahoo.
Currently, Verizon will be keeping a 10% stake in the company, and soon it will be rebranded for just Yahoo. However, the sale will find online media brands which are under the former Yahoo and AOL umbrellas like TechCrunch, Yahoo Finance and Engadget went to Apollo at much lower valuations. Verizon is on the verge of availing AOL for $4.4 billion in the year 2015 and Yahoo in two years later for $4.5 billion.
Verizon may get $4.25 billion in cash from the sale with its 10% stake in the company. Verizon and Apollo mentioned that they expect the transaction might close in the second half of 2021.
There has been an increase in evidence newly that Verizon is required to sell off its media properties and in its place emphasis on its wireless networks and other internet provider businesses. Last year, Verizon sold off HuffPost to BuzzFeed. Recently, it sold off or shut down other media properties like Tumblr and Yahoo Answers.
Before that, Verizon’s original vision for turning Yahoo and AOL properties into online media behemoths might take on Google and Facebook’s supremacy in online advertising. Under former AOL CEO Tim Armstrong, the Yahoo and AOL brands were converted into a new online media division within Verizon called Oath.
However, the Oath project highly failed to earn momentum, and Armstrong left the company in 2018. Oath rebranded again as Verizon Media Group in November 2018 and was run by Guru Gowrappan. Gowrappan will linger to lead Yahoo under Apollo.
By selling Yahoo and AOL, Verizon signaled it is no longer interested in media, unlike its rivals. AT&T is still vexing to develop WarnerMedia into a streaming competitor to Netflix and Disney, even as it fights with loads of debt from its media acquisitions.