Verizon Media, the telecom giant’s media division comprising Yahoo and AOL, will sell to private equity firm Apollo Funds for $5 billion.
Verizon said this morning that, per the terms of the transaction, it will receive $4.25 billion in cash, $750 million in preferred interest, and will maintain a 10% stake in the new company, which will be called Yahoo and continue to be led by its current CEO, Guru Gowrappan. The deal is set to close in the second half of this year.
Verizon Media is also home to popular web brands like Techcruch and Engadget, as well as a lucrative ad business — though the move signals Verizon is throwing in the towel on its longstanding media ambitions. Verizon has also shed other media properties in recent months, selling HuffPost to BuzzFeed last November.
“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,” Gowrappan said in a statement. “This transition will help to accelerate our growth for the long- term success of the company.”
Verizon says its media division has reported strong year-over-year revenue growth for the past two quarters, driven by ads, ecommerce, subscriptions, and strategic partnerships. It says that Yahoo is the fourth most-visited internet property globally, with Yahoo News becoming the fastest-growing news organization on TikTok.
Verizon first acquired 90s internet icon AOL in 2015 for $4.4 billion, and then purchased Yahoo in 2017 for $4.48 billion — subsequently folding both properties into a now-defunct unit dubbed Oath.