Verizon sells internet trailblazers Yahoo and AOL for $5B


The Yahoo logo is displayed outside of offices in Santa Clara, Calif., in this Monday, April 18, 2011, file photo. Verizon is selling the segment of its business that includes Yahoo and AOL to private equity firm Apollo Global Management in a $5 billion deal. Verizon said Monday, May 3, 2021, that it will keep a 10% stake in the new company, which will be called Yahoo. (AP Photo/Paul Sakuma, File)

AOL and Yahoo are being sold again, this time to a private equity firm.

Wireless company Verizon will sell Verizon Media, which consists of the once-pioneering tech platforms, to Apollo Global Management in a $5 billion deal.

Verizon said Monday that it will keep a 10% stake in the new company, which will be called Yahoo.

Yahoo at the end of the last century was the face of the internet, preceding the behemoth tech platforms to follow, such as Google and Facebook. And AOL was the portal, bringing almost everyone who logged on during the internet's earliest days.

Verizon spent about $9 billion buying AOL and Yahoo over two years starting in 2015, hoping to jump-start a digital media business that would compete with Google and Facebook. It didn't work — those brands were already fading even then — as Google and Facebook and, increasingly, Amazon dominate the U.S. digital ad market. The year after buying Yahoo, Verizon wrote down the value of the combined operation, called “Oath,” by roughly the value of the $4.5 billion it had spent on Yahoo.

Verizon has been shedding media assets as it refocuses on wireless, spending billions on licensing the airwaves needed for the next generation of faster mobile service, called 5G. It sold blogging site Tumblr in 2019 and HuffPost to BuzzFeed late last year. The digital media sector in recent years has been consolidating as companies seek profitability.

The properties Verizon is selling include Yahoo Finance, Yahoo Mail and the tech blogs Engadget and TechCrunch.

Despite its difficulty competing with tech giants for ad dollars, leading to cost cuts and layoffs, Verizon Media’s revenue rose 10% in the most recent quarter from the year before, to $1.9 billion. The division still has nearly 900 million monthly users, and generated $7 billion in revenue in 2020, according to Verizon and Apollo.


Apollo says they are “big believers in the growth prospects of Yahoo” and expects that overall growth in digital advertising will boost Yahoo too, said Apollo senior partner David Sambur in a prepared statement. Apollo has invested in other media and tech companies like the photo website Shutterfly and TV and radio stations formerly owned by Cox.

Apollo is betting that the data that the Yahoo division collects from its users, who log in to products like email, appeals to advertisers as ad-tracking technology changes, said Forrester analyst Joanna O’Connell.

Financial firms have played an increasingly prominent role in traditional media as well in recent years as the newspaper industry struggles with the decline of print advertising, buying up chains and slashing costs and jobs.

Verizon will receive $4.25 billion in cash, preferred interests of $750 million and the minority stake.

The deal is expected to close in the second half of the year.

Shares of Verizon Communications Inc., based in New York, rose less than 1% Monday.

Should you invest $1,000 in Verizon Communications right now?

Before you consider Verizon Communications, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Verizon Communications wasn't on the list.

While Verizon Communications currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

13 Stocks Institutional Investors Won't Stop Buying Cover

Which stocks are major institutional investors including hedge funds and endowments buying in today's market? Click the link below and we'll send you MarketBeat's list of thirteen stocks that institutional investors are buying up as quickly as they can.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Verizon Communications (VZ)
4.9394 of 5 stars
$39.91+3.4%6.66%14.46Moderate Buy$44.50
Compare These Stocks  Add These Stocks to My Watchlist 


Featured Articles and Offers

Search Headlines: