Verizon offloads Yahoo! and AOL brands in $5bn sale of media division
Telecoms operator sells 90% stake in a business that also owns the TechCrunch and Rivals media brands to private equity firm Apollo Global Management
Verizon Communications said it is selling its media division to Apollo Global Management for $5 billion, a move that will jettison 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 on Monday. Guru Gowrappan will remain chief executive officer of the media group. Verizon will keep a 10 per cent stake in the business, it said.
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, and in 2019 it sold the blogging platform Tumblr.
The phone company’s priority today is 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 $4.4bn 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 $4.5bn, 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 chief executive, the company wrote off more than $4bn of its media holdings, or roughly half the value of those business, and renamed the division Verizon Media Group.
Verizon Media has more than a dozen online brands. The portfolio includes TechCrunch, Ryot, Built By Girls and Flurry, according to its website. The division had first-quarter revenue of $1.9bn, up 12 per cent from a year earlier, according to a filing.
Verizon shares were up 0.7 per cent to $58.18 at 9.44am in New York on Monday. They have fallen 1.6 per cent in the first four months of the year, compared with the 11 per cent gain in the S&P 500 Index.
Published: May 3, 2021 06:46 PM