Verizon Media has a range of products under its wing-media, cable and digital television, cellular, broadband, etc. Now, they have confirmed to give up their media wing by selling Yahoo and AOL.
Apollo Global Management to purchase Yahoo, AOL for $5 billion
A private equity firm, Apollo Global Management, will purchase it for $5 billion. But, Verizon will retain a 10 percent stake, according to their statement on Monday’s deal. Yahoo is also going to see a new brand outlook after the transfer.
The legacy
What’s in for Verizon?
Verizon acquired AOL in 2015 for digital advertising. It bought Yahoo two years later to double down on advertising its digital content. Verizon bought both AOL and Yahoo at a total of close to $9 billion. The telecom giant had an edge in Silicon Valley and held a dominant position.
However, the likes of Google and Facebook took over this niche. With the shift, market, and competitive pressures, its revenue and earnings plummeted lower than expected. Despite being a great advertising platform, it failed due to stiff competition. All this resulted in AOL writing down the goodwill of Oath by $4.6 billion. The business still generates close to $2 billion every quarter.
With the sale of AOL and Yahoo, Verizon chooses to focus solely on communications. It comes as a surprise since its rivals Comcast and AT&T are drabbling in the media business. Comcast is in the media business with NBCU that owns CNBC. AT&T is growing Warner Media that competes with Disney and Netflix to stream media.