Verizon CEO: ‘Verizon Media will take off in its new home’
Anyone who has followed the storyline of Verizon’s media assets knows that it’s been a somewhat rocky, convoluted journey, beginning with the carrier’s purchase of AOL for $4.4 billion in 2015, and then Yahoo for $4.5 billion in 2017. Now, after a number of asset reconfigurations, iterations and transformations, the company is selling these assets to Apollo Global Management and related entities for $5 billion.
The new company, to be called Yahoo, will continue to be led by Guru Gowrappan, Verizon Media’s CEO, and the carrier will retain a 10% stake in the company.
Prior to this recent announcement, Verizon had already been distancing itself from some of its more troublesome media assets. Last year, the carrier sold HuffPost to BuzzFeed and in 2019, it unburdened itself of Tumblr, a once-promising social media platform that the carrier acquired when it purchased Yahoo. Auttomatic, the parent company of WordPress, bought Tumblr for a mere $3 million, a crushing drop in value from the $1.1 billion Yahoo paid for it years ago. While the short-form blogging platform performed well in its early days, it was soon outpaced by competitors like Facebook, Instagram and Snapchat.
In 2017, Verizon merged AOL and Yahoo into a new media company called Oath, led by Tim Armstrong, AOL’s CEO at the time. Around the time of Armstrong’s departure from the company, Verizon announced a $4.6 billion write-down of Oath assets, citing competitive pressures in the digital ad business. Oath was then renamed Verizon Media Group.
More recently, Verizon attempted to transition Yahoo into Yahoo Mobile, a wireless provider that works on Verizon’s network. The new service offered one unlimited, no-contract plan for $39.99/month.
According to Verizon, the sale of its media assets, the latest development in the saga, will usher in the opportunity to “aggressively pursue growth areas and stands to benefit its employees, advertisers, publishing partners and nearly 900 million monthly active users worldwide.”
“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.”
Hans Vestberg, Verizon’s CEO, expressed confidence that Verizon Media will “take off in its new home.”
“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. The next iteration requires full investment and the right resources,” he said.
The transaction, which is expected to close in the second half of 2021, also includes the sale of Techcrunch, Engadget and Ryot.
