Verizon said on Monday (May 3) that it is selling off its media business, which includes Yahoo and AOL, to private equity firm Apollo Global Management for $5 billion. The telecom giant will still own 10 percent of Verizon Media, which is simply being called Yahoo!.
“The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem,” said Guru Gowrappan, CEO, Verizon Media, in a press release. “With Apollo’s sector expertise and strategic insight, Yahoo will be well-positioned to capitalize on market opportunities.”
Verizon Media also has a digital advertising platform. Gowrappan will lead the newly named Yahoo.
Apollo is “thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands,” said Reed Rayman, private equity partner at Apollo. He praised Verizon Media’s team and its progress in recent years.
“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. “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.”
The deal is the latest drama for two of the internet’s earliest powerhouses. AOL was once the go-to service that most people used to get online, while Yahoo was a top search engine. Since the 1990s, however, the two have been supplanted by search engine Google and social media powerhouse Facebook. Verizon Media also publishes online news sources Yahoo Sports and TechCrunch.
The sale shows a drastic change of strategy from Verizon’s formerly high ambitions in digital media. In its first-quarter earnings results, Verizon reported a year-over-year net increase of 25.4 percent, resulting in a $5.4 billion haul. Earnings were $1.31 per share, beating out the expectation from analysts of $1.29.
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