Verizon forgoes its media arm, Yahoo and AOL to Apollo Global Management, the equity group that acquired the operation of Venetian Las Vegas. The early internet rockstars were sold at $5 billion, the company announced.
The equity firm now owns the 90 percent share of both brands, now collectively rebranded as Yahoo, sans the exclamation mark. Accordingly, Verizon will be able to keep what is left of the deal, a 10 percent stake of the renamed company.
Originally, Verizon bought the two internet pioneers separately at $9 billion -- $4.8 billion for Yahoo and another $4.4 billion for AOL.
Despite these falling numbers, Yahoo and AOL still boast a good revenue stream in the first quarter of 2021 at $1.9 billion. It is a 10 percent increase from last year, as reported by The New York Times.
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Yahoo's "Most Thrilling" Evolution
Guru Gowrappan, Verizon's media business head, will still lead the new Yahoo. He called the new development, in a memo to employees obtained by the New York Times, the "most thrilling yet."
On an optimistic note, Gowrappan assured employees that the new owners will allow the company to grow -- which, according to him, was not feasible with Verizon, as the latter was focused on extensively expanding its 5G network.
Apollo, on the other hand, believes that the two brands were lost in a large corporate empire. It plans to, furthermore, focus on Yahoo to accelerate its growth, New York Times reported.
Additionally, the equity firm is expecting to gain in digital advertising as it rebounds post-pandemic. The group is on a positive note despite the ongoing scrutiny and regulations of big tech companies in digital ads.
Apollo, in the past, was able to boost an internet photo service Shutterfly Inc. after its purchase. That must have been why Gowrappan was optimistic for the new company when he addressed its employees.
Also, Yahoo, according to the Wall Street Journal (WSJ), is a popular place for sports gambling. Apollo, coincidentally, has hundreds of licenses to operate betting.
Verizon to Focus on its 5G Network
Verizon has changed direction through the years.
Its Chief Executive Hans Vestberg said in an interview with the WSJ that the company is slated to provide "network-as-a-service" to its customers. This would mean that in the long-term, the company would be focusing on fiber optic and cellular infrastructure.
"We prioritize our investments with the network," Vestberg said to WSJ.
In this strategy, it is only befitting that a media arm finds its new home.
Yahoo and AOL as the dethroned kings of the internet
Yahoo and AOL, in the early internet days, ruled the market share. Yahoo was the internet's homepage. Similarly, AOL's services were dominantly used by people on the internet. That was all until Google replaced the internet's homepage. And AOL, like Yahoo today, became a publisher instead.
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Written by Teejay Boris
