Verizon, the US telecoms giant, has announced that it is selling its media assets, which include Yahoo, AOL, TechCrunch, Engadget, and more, to Apollo Global Management, a US private equity firm, in a deal worth $5 billion. Verizon will retain a 10% stake in the division, which will be rebranded as Yahoo.
The deal marks the end of Verizon’s attempt to compete in the digital media and online advertising market, which is dominated by Google and Facebook. Verizon bought Yahoo in 2017 and AOL in 2015 for a combined $9 billion, hoping to leverage their large user base and content offerings. However, the acquisition was overshadowed by Yahoo’s massive cyber-attacks and data breaches, which resulted in a $350 million price cut. Verizon also failed to acquire Yahoo’s stake in Alibaba and Yahoo Japan, which are now worth billions of dollars.
Verizon said that the sale will allow it to focus on its core wireless business and 5G network. “We are excited to be joining forces with Apollo,” said Guru Gowrappan, CEO of Verizon Media. “The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform.”
Apollo sees tremendous potential in Yahoo
Apollo Global Management is one of the world’s largest alternative investment managers, with more than $450 billion of assets under management. The firm has a history of investing in media and technology companies, such as Cox Media Group, Rackspace, Shutterfly, and Sirius XM.
Apollo said that it sees tremendous potential in Yahoo and its unparalleled collection of brands. “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.”
David Sambur, senior partner and co-head of private equity at Apollo, 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. Apollo has a long track record of investing in technology and media companies and we look forward to drawing on that experience to help Yahoo continue to thrive.”
Yahoo remains a popular destination for millions of users
Yahoo was founded in 1994 as one of the first web portals that offered a wide range of free and informative web services to consumers. Yahoo was once the most visited website in the world, with more than one billion monthly active users. Yahoo also pioneered online advertising, search engine, email, messenger, news, sports, finance, entertainment, and more.
However, over the last decade, Yahoo has faced an uphill struggle against more powerful rivals like Google, Bing, Facebook, Twitter, ESPN, Fandango, Weather.com, and others. Yahoo also missed several opportunities to acquire or partner with emerging companies like YouTube, Facebook, Google, Alibaba, and others. Yahoo’s market value plummeted from over $100 billion in 2000 to less than $5 billion in 2016.
Despite its challenges, Yahoo still commands a huge audience as millions of users check their Yahoo Mail accounts, read news headlines on Yahoo News or Sports or Finance or Entertainment or Lifestyle or Music or Movies or TV or Games or Shopping or Travel or Autos or Health or Weather or Answers or Groups or Flickr or Tumblr or Fantasy Sports or Horoscopes or Mobile Apps or Podcasts or Live Events or Original Shows or more on its homepage every day. Yahoo also provides innovative products like Yahoo Plus (a subscription service that offers premium features across its portfolio), Yahoo Shops (a new marketplace that connects consumers with brands), and Yahoo Answers (a community-driven platform that allows users to ask and answer questions).
Yahoo is part of the Yahoo family of brands, which includes TechCrunch (a leading source of news and analysis on technology startups), Autoblog (a website that covers everything about cars), Engadget (a website that covers consumer electronics and gadgets), HuffPost (a website that covers news and opinion), Ryot (a website that produces immersive content using virtual reality), Flurry (a mobile analytics platform), Gemini (a native advertising platform), BrightRoll (a video advertising platform), Verizon Digital Media Services (a content delivery network), AOL (a web portal that offers email, news, entertainment, and more), and others