AOL and Yahoo are sold again, this time to a private equity firm. Verizon will sell Verizon Media, which includes the pioneering technology platforms, to Apollo Global Management in a $ 5 billion deal.
Verizon said on Monday it would retain a 10% stake in the new company, which will be called Yahoo – omitting the iconic exclamation mark that has lasted, arguably beyond its peak, for so many years. .
“Drop the infamous ‘!’ at the end of Yahoo’s nickname, Apollo signals a change of direction, ”analysts at Raymond James said in a note to investors on Monday. “With an impressive number of daily users, including a large and extremely sticky email client base … the guys in PE have a good opportunity to mine for money while moving the business into the news. trends online, and we expect a full rebranding is in store. “
Yahoo at the turn of the last century was the face of the internet, preceding giant tech platforms to follow, such as Google. And AOL was the portal, bringing almost everyone who logged on during the early days of the Internet online.
Verizon had hoped to lead the AOL acquisition to a rapid entry into the mobile market, spending more than $ 4 billion for the company in 2015. The plan was to use the advertising platform launched by AOL to sell digital advertising. Two years later, he spent even more to acquire Yahoo and combined the two.
However, the speed at which Google and Facebook grew dashed those hopes, and it quickly became clear that the new company would likely not meet Verizon’s highest aspirations for the two.
The year following the Yahoo purchase, Verizon noted the value of the combined operation, called “Oath,” of over $ 4.5 billion spent on Yahoo.
As part of the deal announced Monday, Verizon will receive $ 4.25 billion in cash, $ 750 million in preferred interest and minority interest. The transaction includes the assets of Verizon Media, including its brands and businesses such as Yahoo and AOL.
The agreement includes all brands and companies of Verizon Media and nearly 900 million monthly active users worldwide.
Current Verizon Media CEO Guru Gowrappan will remain CEO.
“The good thing for Verizon”
“Strategically, it’s the right thing to do for Verizon,” according to New Street Research analysts. “The media sector has no material value for its other activities. This allows Verizon [management] to focus attention and resources on wireless. ”
“The transaction also creates a strong strategic contrast with AT&T, which is doubling its investments in its media properties and leaving the field in wireless,” added the analysts.
The deal is expected to be concluded in the second half of the year.