The media unit will be known as Yahoo following the transaction’s close, which is expected to come in the second half of 2021, continuing to operate under the leadership of Guru Gowrappan, with Verizon keeping a 10% stake in the business. Following a long struggle to compete with Facebook and Google in the Internet advertising space, Verizon has agreed to sell its media businesses, including AOL and Yahoo, to Apollo Global for $5 billion.
After writing $4.6 billion off the value of the businesses in 2018, Verizon will get just $4.25 billion in cash from private equity firm Apollo. Reed Rayman, partner at Apollo, said the firm will look to expand advertising and ecommerce, as well as growing key assets such as Yahoo Finance and Yahoo Sports, via new initiatives such as subscriptions.
The sale of Verizon’s media businesses to Apollo follows much interest in Yahoo from Apollo, which dates back to 2017. While the purchase from Apollo spells the end to an ultimately unsuccessful advertising venture on Verizon’s part, Ted Chamberlin, vice-president, analyst – media and entertainment lead at Gartner, told Information Age: “I think this is a win for Verizon and Hans Vestberg, as he gets to recoup some cash to invest into continued 5G rollouts, but a win at a significant loss.
In 2019, the telecoms corporation sold the blogging platform Tumblr, before going on to agree to sell the HuffPost online news service to BuzzFeed Inc. last year. The development is believed to be a demonstration of a shift in focus for Verizon, as it turns its attention to developing 5G infrastructure.
“However, both brands have not been able to compete in the Google and Facebook-dominated advertising space, and with the depreciation of third party cookies on the horizon, the ad business for AOL and Yahoo will even more of a challenge.” “Apollo acquires an asset that still has gravity with users — Yahoo still counts around 900 million active users worldwide.
New opportunities for Yahoo James Bristow, SVP EMEA at Cradlepoint, explores how businesses can ensure a return on investment (ROI) from the advent of 5G services. Read here How can businesses ensure ROI from 5G services?
News Highlights Business
- The sale of Verizon’s media business to Apollo “wins for Verizon and Hans Vestberg”
- Check all news and articles from the Business news updates.