Verizon has sold its AOL and Yahoo! properties to Apollo Global Management for $5B. The company will sell both units for about half of the price it originally paid for the two. The company will retain a 10% stake in the company, now known as Yahoo and led by CEO Guru Gowrappan.
Verizon’s Yahoo and AOL acquired by Apollo for $5B
It is worth going back to 2017 when Yahoo! became owned by Verizon after it paid $4.5 billion. At that time, Marissa Mayer resigned as CEO of the company.
This deal was not so beneficial. It already started off on the wrong foot: Yahoo! was the victim of the most serious hacking in history and that led Verizon to ask to close the deal at a lower price than initially mentioned. This sale, four years later, of Yahoo! together with AOL for a mere $5B puts an end to Verizon’s troubled experiment with media and advertising production.
Who is Apollo and what are their plans with Yahoo?
Apollo, meanwhile, is a private equity firm that owns the Venetian resort in Las Vegas and the Michaels craft store. Apollo co-founder Leon Black recently stepped down as chairman, shortly after it was revealed that he paid more than $150 million to Jeffrey Epstein for advice. The executive claimed it was for health reasons.
What plans does Apollo have with Yahoo!, a company that has had to sell dozens of its businesses that were not working, in order to continue to survive? Apollo has said that Yahoo! has tremendous potential.
Yahoo! was worth $125B in 2000. However, since then it has had to sell about 70% of its major services.
Verizon originally paid $4.4 billion for AOL in 2015 and another $4.5 billion for Yahoo two years later. The media outlets controlled by this firm included properties such as Yahoo Sports, TechCrunch, and Engadget and they were consolidated under the name Verizon Media Group in 2018. However, this has reduced the value of its media venture by nearly half.
In 2019, They sold Tumblr for an undisclosed sum believed to have been less than $3 million. In 2013 Yahoo! had paid $1.1 billion for this blogging platform. Last year, Verizon dumped Huffpost for Buzzfeed, a property for which AOL paid $315 million in 2011.
Back in the day Yahoo! was Google‘s search engine rival. In the past, it could have bought companies like Google and Facebook and but the company has chosen another path.