Private equity firm Apollo Global Management has acquired Verizon’s media group for $5 billion, the two companies announced Monday.
Verizon Media, which includes properties from the former internet empires of AOL and Yahoo, will be rebranded as “Yahoo,” the announcement said. Verizon said it will keep a 10 percent stake in the company.
The sale includes online news outlets TechCrunch, Yahoo Finance, Engadget and others. Apollo and Verizon said they expect the sale to close in the second half of 2021.
Verizon is cutting its losses on its media businesses, with the deal valuing the businesses at significantly lower prices than Verizon paid just a few years ago. Verizon bought AOL for $4.4 billion in 2015, and it bought Yahoo for $4.5 billion in 2017.
Verizon will get $4.25 billion in cash for the properties, in addition to its 10 percent stake in Yahoo.
The COVID-19 pandemic hammered the advertising market a year ago, sending revenue for advertising-driven online publications into a spiral. In the announcement of Monday’s deal, Verizon Media CEO Guru Gowrappan touted the company’s strong recent recovery from last year’s lows. He added that Apollo will help the company grow its “full stack digital advertising platform.”
“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,” David Sambur, co-head of private equity at Apollo, said in a statement. “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.”
The deal is Verizon’s latest step toward exiting the media market. Verizon sold HuffPost to BuzzFeed last year and it also recently sold off or shut down other properties including Tumblr and Yahoo Answers.
As it exits media, Verizon is expected to focus on its core wireless networks business and other internet provider businesses.
For once-powerful media giants AOL and Yahoo, the deal represents failure to adapt and thrive as the consumer internet evolved. The two companies were early titans as the consumer internet formed, but have now become the latest media operations to fall into the hands of private equity.