AOL and Yahoo are synonymous with the early modern days of the internet, and now these two internet veterans are being offloaded yet again. Verizon has just announced that it's selling AOL and Yahoo in a deal valued at around $5 billion.
AOL and Yahoo Are Under New Ownership (Again)
In a post on the Verizon News Center, the company revealed that it's selling off Verizon Media, a branch that consisted of AOL and Yahoo, as well as other online media platforms. Private equity firm, Apollo Global Management, will be acquiring both companies.
The $5 billion deal is significantly lower than what Verizon initially paid for both companies. Verizon purchased AOL for $4.4 billion in 2015 and bought Yahoo for $4.5 billion in 2017, making the new deal worth just about half of what Verizon paid.
At the time, the purchase might've seemed like an opportunity for Verizon to bring two failing companies back to life, which clearly isn't what happened. While AOL and Yahoo still rake in a fair share of users, they're still not anything like they used to be in their heydays.
Verizon will still hold a 10 percent stake in the new company, which will simply be renamed "Yahoo." David Sambur, the senior partner and co-head of private equity at Apollo, seems to have high hopes for Yahoo's future, stating:
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. 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.
The sale of Verizon Media marks Verizon's exit from the media realm. In 2019, Verizon sold Tumblr and in 2020, the company kicked HuffPost to the curb. This most recent sale will likely give Verizon more resources to allocate to its mobile network and the expansion of 5G.
How Will the Acquisition Affect Yahoo and AOL?
If Apollo successfully resurrects Yahoo and AOL, that will be a truly impressive feat. Usage on both platforms has been slowly declining over the years, and it will be interesting to see how the acquisition plays out.
Will Apollo radically modernize Yahoo and AOL, making them more attractive to younger internet users? Or will Apollo keep them the same and do just enough to keep both afloat? Either way, it's still nice to know that both internet elders aren't headed to the digital graveyard (not yet, anyway).