Verizon just shaved off some of its fat. Today, the company confirmed it was selling off its Yahoo and AOL properties (under the umbrella “Verizon Media”) for a cool $5 billion, $4 billion less than the $9 billion it originally paid for them. The buyer, a private equity firm called Apollo, will name the newly-formed company Yahoo and have its CEO, Guru Gowrappan, lead it.
This isn’t the first time Verizon has gotten rid of property it failed to do something with. Back in 2019, Verizon sold off Tumblr which was owned by Yahoo. It only sold for about $3 million, which is significantly less than the $1.1 billion Yahoo had to fork over to acquire the blog-powered network.
Right now, it’s unclear what Apollo intends to do with Yahoo or AOL, but one thing’s for certain: both brands need severe revitalization. Neither of these names have bene relevant in the past 5+ years, so some sort of revamp of their services or introduction of something new and groundbreaking needs to happen if any profit is to be made.
Interestingly, Apollo is the same firm who gobbled up The Venetian Resort in Las Vegas and crafts retailer Michaels, so they might just be focused on putting Yahoo and AOL on ice until they bring in the right people to get stuff done.
“We are excited to be joining forces with Apollo,” said Guru Gowrappan, CEO, 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. This transition will help to accelerate our growth for the long- term success of the company.”
“Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous,” said Hans Vestberg, CEO, Verizon. “The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.”
Notably, Verizon will keep a 10 percent stake in the new business under Apollo. The deal is expected to close in the second half of 2021.