Verizon announced yesterday in a press release on its website that it is losing its media activities including Yahoo, AOL, TechCrunch, Yahoo Finance, but also Engadget. The company is selling it to Apollo Global Management, an American private equity firm, for $ 5 billion. That’s almost twice what she bought four years ago.
Verizon says goodbye to Yahoo and AOL
This is known as bad business. A few years ago, Verizon had stepped up its investments in an attempt to become a major player in online advertising and compete with Facebook and Google. The company bought AOL for $ 4.4 billion in 2015. Two years later, Yahoo will join Verizon for the modest sum of $ 4.48 billion. These two purchases gave birth to the company’s media and advertising arm, known as Oath. However, this project did not have the expected success and resulted in Verizon laying off 40,000 employees in that department.
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His attempt to get off on the right foot with Verizon Media in 2018 was also unsuccessful. The American multinational had to plan a loss of 4.9 billion dollars, of which 4.6 billion was only for this branch. An astronomical sum and a project that is abandoned today and sold to Apollo Global Management. “Thanks to Apollo’s industry expertise and strategic vision, Yahoo is well positioned to capitalize on market opportunities. “the telecommunications company said in the statement.
As part of the transaction, Verizon will retain a 10% stake in the new company, known simply as “Yahoo”. Verizon Media Group’s CEO Guru Gowrappan will typically stay on top in the second quarter after the deal closes.
Verizon wants to focus on 5G
If the dream of becoming a content producer flies to Verizon, it will stay in the race for 5G. The operator would now like to concentrate on the provision of its network and is doubling its efforts. In the past few months, the alliance with Microsoft and Nokia to become a private 5G super-service and the $ 6 billion contract with Samsung have made the company an integral part of the 5G rollout.
Verizon is gradually expanding network coverage in the US and continues its battle with operators AT&T, T-Mobile and Comcast. Earlier this year, the battle had hit records at auction of over $ 76.5 billion. Verizon, which largely exceeded its $ 70 billion budget during the event, therefore appears poised to go into debt to bank everything on 5G and compensate for the failure of its media industry.