Verizon announced Monday that it will sell its media business -- which includes AOL and Yahoo -- to Apollo Global for $5 billion as it channels its focus on 5G. Under the terms of the deal, Verizon will receive $4.25 billion in cash, preferred interests of $750 million and retain a 10% stake in Verizon Media.
Verizon bought AOL in 2015 for $4.4 billion, and Yahoo for $4.5 billion in 2017. Both deals added up to a media experiment that challenged Verizon with revitalizing two struggling yet iconic brands.
The Yahoo acquisition was complicated by two massive cyberattacks that exposed more than a billion accounts back in 2016. Verizon and Yahoo eventually agreed to reduce the price of the acquisition by $350 million as a result of the two hacks.
Verizon also made an unsuccessful attempt to rebrand its digital advertising and media business as Oath. The goal was to position Oath as a disruptor in digital, but increased competition and market pressures resulted in a different scenario, and revenues and earnings trended downward. Oath's ambiguous name probably didn't have a material impact on Verizon's financials, but it was confusing nonetheless.
Verizon then disclosed a $4.6 billion write down in the value of Oath before officially ditching the brand for good in 2017. The wireless giant replaced the Oath brand with the more straightforward Verizon Media Group in an effort to better align the media division as one of Verizon's core businesses.
Over the last two years, Verizon's focus has narrowed as the company builds out its 5G Ultra-Wideband and nationwide network, but the media business remains viable. In Verizon's most recent earning report, Verizon Media reported revenue of $1.9 billion in the first quarter, up 10.4% from a year ago.
Verizon said the corporate carveout of Verizon Media will allow the business "to aggressively pursue growth areas and stands to benefit its employees, advertisers, publishing partners and nearly 900 million monthly active users worldwide".
"Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous," said Hans Vestberg, CEO of Verizon. "The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home."