Verizon is exiting the media business.
The telecom giant is selling Yahoo, AOL and the remainder of its Verizon Media brands to the private equity firm Apollo Global Management in a $5 billion deal announced Monday.
The new company will be called Yahoo and will continue to be run by CEO Guru Gowrappan. Verizon will retain a 10 percent stake in the new company, and LionTree, which served as the lead financial advisor on the transaction, will also be an investor alongside Apollo. Under the terms of the deal, Apollo will pay Verizon $4.25 billion in cash and preferred interests of $750 million.
Verizon had purchased both Yahoo and AOL for nearly $9 billion just a few years ago. More recently, the telecom company sold HuffPost (which it acquired in the AOL deal) to BuzzFeed in an all-stock deal. Verizon also retained a small ownership stake in HuffPost.
Verizon Media includes Yahoo, which still has significant scale through its Yahoo News and Yahoo Finance portals, as well as Yahoo’s popular email service. It also owns AOL.com, which remains a popular homepage for many web users, as well as some niche news sites like Engadget and TechCrunch. Verizon Media also includes an advanced advertising business, which was created by merging the adtech teams of Yahoo and AOL.
The sale officially marks the end of Verizon’s efforts to become a competitor to Google and Facebook in the digital advertising space. Much of that effort was spearheaded by Tim Armstrong, a former Google executive who was CEO of AOL when Verizon acquired it. After a short-lived rebrand as “Oath,” Armstrong left the company in 2019, and the media assets rebranded as Verizon Media.
“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, Verizon’s CEO, in a statement announcing the deal. “The next iteration requires full investment and the right resources. 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.”
This article was originally published by The Hollywood Reporter.