Verizon, the phone giant that acquired Yahoo and AOL, is about to close a deal selling the two web services providers to Apollo Global Management.
The upcoming deal was first reported by Bloomberg, adding that Verizon will still have a stake in the media arm.
Included in the expected business agreement is Verizon’s advertising technology business. Yahoo and AOL will have a sterling value of $4 billion to $5 billion by the time the deal is completed.
Sources of this new deal mentioned that there is still a probability that the contract can fall apart since the talks remain confidential.
The mobile business comes first
Verizon CEO Hans Vestberg said that the company would draw a majority of its attention to the mobile business’s technological development since Verizon, first and foremost, is a wireless network operator.
As demand for the 5G network increases, Verizon is set to pay $53 billion to license wireless airwaves that will aid in the expansion of infrastructures necessary for 5G coverage.
Additionally, a projected $10 billion will cover the establishment of cell towers and power systems upgrades.
In 2015, Verizon purchased AOL for $ 4.4 billion intending to sell ads that could rival digital content. AOL was regarded as a pioneering internet stronghold until several startups took over. Verizon was set to utilized AOL’s advertising technology to expand its media business.
The initial strategy of the company extended to its acquisition of Yahoo at $4.8 billion in 2017. Both Yahoo and AOL were combined under the umbrella oath.
Although both web services providers were once the powerhouse during the onset of the digital era, they end up running behind formidable competitors, namely Google and Facebook, when it comes to digital advertising.
The new endeavor that concentrat on the technological advancement of its mobile services puts its other business either on hold or on sale. So naturally, since its media business has not reached its primary goal, Verizon is bound to give it up.
Initially, through the established systems of Yahoo and AOL, the said business was set to provide unique content that could outdo its competitors.
However, since user-generated content became popular, the strategy failed to materialize.
Apollo’s buying extravaganza
Since the expected deal has not been officially made public, Apollo has not expressed its plans regarding the business.
Nonetheless, despite falling behind contemporary internet giants, Verizon’s s media business continues to generate impressive profit and still holds large audiences.
With net revenue of $1.9 billion in sales, Apollo could choose to retain the division’s operations since it is also involved in multiple media deals. Under its wing are television and radio stations of the Cox Media Group.
Furthermore, Yahoo and AOL still produce relevant content in their channels like Yahoo Sports and TechCrunch.
Apollo managed to acquire more assets such as the Venetian Resort in Las Vegas and the crafts retailer Michaels in the middle of the pandemic.