Verizon sells Yahoo and AOL to Apollo for $5billion

Telecoms giant, Verizon, announced that it has agreed to sell its media group, which includes Yahoo and AOL, to private equity firm Apollo Global Management, for $5 billion. This is about half of what the company paid for the two entities – $4.4 billion for AOL in 2015 and $4.5 billion for Yahoo in 2017

Verizon says it will retain a 10% stake in the company, which will be known as Yahoo at close of the transaction and continue to be led by CEO Guru Gowrappan.

“We are excited to be joining forces with Apollo,” said Guru Gowrappan, CEO, Verizon Media. “The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform. This transition will help to accelerate our growth for the long- term success of the company.”

“We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands,” said Reed Rayman, Private Equity Partner at Apollo. “We have enormous respect and admiration for the great work and progress that the entire organization has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo’s growth in its next chapter.”

“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,” said David Sambur, Senior Partner and Co-Head of Private Equity at Apollo. “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.” 

“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. “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.”

Under the terms of the agreement, Verizon will receive $4.25 billion in cash, preferred interests of $750 million and retain a 10% stake in Verizon Media. The transaction includes the assets of Verizon Media, including its brands and businesses. 

Verizon’s original objective in the acquisition of AOL and Yahoo was to take on Google and Facebook’s dominance in online advertising. Both brands were merged into a new online media division within Verizon called Oath. However, the Oath project largely failed to gain momentum, and CEO Armstrong left the company in 2018. Oath then rebranded as Verizon Media Group in November 2018 and was run by Guru Gowrappan.