Apollo Completes $5B Yahoo Acquisition - Verizon Media Sold

Apollo Global Management Completes Yahoo Acquisition

Apollo Global Management has finalized the acquisition of Yahoo from Verizon, a transaction announced this morning. The deal’s total value reaches $5 billion, comprised of $4.25 billion in cash and $750 million in preferred interests. Verizon will maintain a 10% stake in the newly restructured company.

A New Chapter for Yahoo

Guru Gowrappan, CEO of Yahoo (previously the head of Verizon Media Group), stated that this marks the beginning of a new era for the brand. He anticipates a period of renewed opportunities as an independent entity.

Gowrappan expressed optimism for future growth and innovation within Yahoo, alongside their new partners at Apollo.

Speculation exists regarding Gowrappan’s long-term role as CEO following the deal’s completion, though he currently remains in the position.

The Scope of the Acquisition

The acquired group encompasses not only core Yahoo properties like Mail, Sports, and Finance, but also includes prominent digital media brands. These include TechCrunch, AOL, Engadget, and RYOT.

Collectively, these brands reach approximately 900 million monthly active users worldwide, positioning the entity as the third-largest internet property, according to Apollo’s data.

Verizon’s Exit from Online Media

This acquisition concludes Verizon’s multi-year endeavor to establish a significant presence in the online media landscape, particularly within the adtech sector.

Ultimately, this venture proved excessively expensive and largely unprofitable, diverging from Verizon’s primary growth objectives.

A History of Acquisitions and Write-Downs

The news arrives during a period of considerable consolidation within the online media industry. Verizon initially acquired AOL in 2015 for $4.4 billion.

Subsequently, Yahoo was purchased for $4.5 billion in 2017, leading to the formation of Oath, a combined entity.

In late 2018, Oath experienced a $4.6 billion write-down following the merger.

Potential Strategies for Apollo

The future direction under new ownership remains uncertain. However, private equity firms often employ strategies such as divesting parts of the business or streamlining operations.

Apollo has committed to continued investment in the acquired assets and has guaranteed job security for employees, at least initially.

Apollo’s Vision for Yahoo

Reed Rayman, Apollo Partner, expressed enthusiasm for collaborating with Yahoo’s workforce to build upon its existing momentum.

He stated their intention to position Yahoo as a leading independent consumer internet and digital media company.

Apollo plans to invest in growth areas, including enhancing customer-focused offerings, expanding reach, and improving the user experience.

The firm’s extensive portfolio of TMT (Technology, Media, and Telecommunications) holdings may also be leveraged to benefit Yahoo.