Private equity group Apollo acquires Verizon Media
Verizon is selling its media business – home to TechCrunch, Engadget, Yahoo, AOL and Verizon's advertising technology – to US private equity group Apollo Global Management in a $5bn deal.
The deal is still subject to closing conditions and is expected to be completed in the second half of 2021. After the sale, Verizon Media will operate as Yahoo, leveraging the heritage that brand has in the market.
Verizon will continue to own a 10% stake in the business and the current CEO Guru Gowrappan will continue to lead it.
Although Verizon is retaining a stake, the sale signifies a formal retreat away from media and advertising for the telecoms giant as it focuses on its core network businesses and rolling out 5G wireless technology. Its 5G internet services covered 230 million people in more than 2,700 cities across the US as of December last year.
Verizon had hoped to create a content and marketing platform that would allow it to compete with the likes of Google and Facebook having bought AOL in 2015 and Yahoo in 2017 for a combined $9bn. The media divisions owned by Verizon, which also included properties like TechCrunch, Yahoo Sports and Engadget were consolidated into a group called Oath which was later renamed Verizon Media Group in 2018.
The sale of Verizon Media Group comes after Verizon sold the blogging platform Tumblr in 2019 to WordPress and offloaded the news website HuffPost last year to BuzzFeed.
Verizon Media reported $2.3bn in revenue in Q4 of 2020 and typically generates $7bn of revenue each year, reaching nearly 900 million people worldwide each month.
Verizon faced similar issues to other telecoms companies that have sought to use their consumer data to inform advertising businesses, which is that these ad businesses were secondary to the main telecoms business and the advancement of privacy laws means that it is increasingly unlikely that they will drive value from the synergies they were seeking.
Apollo has an extensive range of holdings in the media, tech and telecoms sector including ADT, Coinstar and Cox Media and may be hoping to use the ad-tech infrastructure it acquires to help it monetise these properties more effectively.
David Sambur, Co-Head of Private Equity, Apollo: “we are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet programmes.”
It’s understood that Verizon 1st party data will still be available to the new Yahoo as Verizon will still maintain a minority stake in the business and Apollo will gain all the data associated with the media assets.
There are also no expected changes in Verizon Media’s strategic partnerships, including its Microsoft partnership. For advertisers, after numerous deaths and rebirths, they will be waiting to see in how Yahoo will return this time and how the new offering under Apollo will compare to the might of the global digital platforms of Facebook and Google given Verizon is stepping away from that fight.