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Verizon sells off Yahoo and AOL to focus on its wireless business

The company is selling off its media unit to private equity firm Apollo Global Management

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Photo (c) liorpt - Getty Images
Verizon is bidding farewell to its media group, home to digital brands AOL and Yahoo. The company is selling the unit to a private equity firm.

In a $5 billion deal, Apollo Global Management will be the new parent company of Verizon Media -- a deal that comes preloaded with 900 million monthly active users worldwide. Among the more well-known consumer-side companies Apollo has an investment in are the home security service ADT, movie rental company Redbox, photo service company Shutterfly, and online education provider University of Phoenix.

Verizon Media has been a heavy burden for the company, taking four years for it to show year-over-year growth since the wireless titan acquired Yahoo for $4.48 billion. The company is not getting out of the digital media business altogether, rather just shifting gears with an emphasis on its internet-provider businesses. As part of the deal, Verizon is holding on to a 10% ownership stake just in case there’s a seismic shift back to digital media down the line.

Value in Yahoo’s name

Yahoo -- the once golden child of internet search -- has been left to pick up breadcrumbs left by Google for the last decade. However, out of the three major search engines -- Google, Bing, and Yahoo -- only Google and Yahoo were turning a profit as of mid-2020. 

Apollo was happy to take Yahoo off Verizon’s hands, especially for the advertising revenue it brings. When the COVID-19 forced people indoors and online, Yahoo experienced quite a leap in shopping and services. Yahoo Mail-based commerce grew seven times what it was in 2019 and the company’s overall revenue jumped 187%, led by triple digit spurts by Yahoo Finance Premium and Extra Crunch Premium, its weekly event series connecting company founders with tech leaders. 

The Yahoo News niche is also of particular value to Apollo as it continues to evolve -- especially with Generation Z. Recently, it claimed the slot of the fastest growing news organization on TikTok. 

“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,” said David Sambur, Senior Partner and Co-Head of Private Equity at Apollo. “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.” 

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