Verizon To Divest Media Assets Including Yahoo, AOL To Focus On 5G

Verizon Communications Inc VZ is near a deal to sell Yahoo and AOL to the private equity firm Apollo Global Management Inc APO, renouncing its digital ad competition with Alphabet Inc GOOG GOOGL Google and Facebook Inc FB to focus on 5G network building, the New York Times reports.
The upcoming deal is estimated to value the brands between $4 billion and $5 billion, including Verizon’s advertising technology business.
Verizon had acquired AOL for $4.4 billion in 2015. AOL head Tim Armstrong aspired to build a “house of brands” at Verizon under the Oath division. Verizon had acquired Yahoo! ’s internet properties for $4.5 billion in 2017 to tap its over one billion users for online ads. However, Verizon CEO Hans Vestberg wrote off over $4 billion of its media holdings and renamed Verizon Media Group’s division after assuming charge in 2018.
Verizon Media’s online brand portfolio includes TechCrunch, Ryot, Built By Girls, and Flurry. The division posted Q1 revenue growth of 12% year-on-year to $1.9 billion.
The media business did not prove to be fruitful. Verizon inked an agreement with The Walt Disney Co DIS in 2019 to offer its new streaming service Disney+ for free to its customers. Interestingly, AT&T Inc T acquired Time Warner for $85 billion in 2018 to create its streaming platform, HBO Max.
Verizon agreed to pay $53 billion in March to license wireless airwaves to help it expand its 5G infrastructure. Verizon also plans to spend $10 billion over the next few years to wire more cell towers and upgrade its systems. The company’s total debt has crossed $180 billion.
Price action: VZ shares traded higher by 0.02% at $57.8 in the premarket session on the last check Monday.

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