AOL and Yahoo are being sold for the second time, this time to a private equity group. Verizon Media, which includes the pioneering tech platforms, will be sold to Apollo Global Management for $US5 billion ($6.5 billion).
Verizon announced on Monday that it will retain a 10% stake in the new company, which will be called Yahoo.
Yahoo was the face of the internet at the end of the last century, preceding the behemoth tech platforms that followed, such as Google and Facebook. And AOL was the portal, bringing almost everyone who logged on during the early days of the internet.
Verizon had hoped that by spending more than $US4 billion on AOL in 2015, it would be able to quickly enter the mobile market. The plan was to sell digital advertising through AOL’s advertising platform. It spent even more money two years later to acquire Yahoo and merge the two.
However, the rapid growth of Google and Facebook dashed those hopes, and it became clear very quickly that the two were unlikely to meet Verizon’s highest expectations.
Verizon wrote down the value of the combined operation, dubbed “Oath,” by more than the $US4.5 billion it paid for Yahoo a year later.
Verizon will receive $US4.25 billion in cash, $US750 million in preferred stock, and a minority stake as part of the deal announced on Monday.
Verizon Media’s assets, including its brands and businesses such as Yahoo and AOL, are included in the transaction. The transaction is expected to be completed in the second half of the year.