Verizon is selling AOL and Yahoo at what looks to be a substantial loss.
Wireless provider Verizon spent $4.4 billion dollars to buy AOL back in 2015. In 2017, the company laid out another $4.48 billion to purchase Yahoo. They combined both companies into a larger company they branded as Oath. When that name didn’t catch on, they rebranded to Verizon Media. Now, Verizon has announced it’s selling both companies to Apollo investment group for $5 billion dollars. Verizon had decided to concentrate on its highly profitable wireless business.
The company purchased Yahoo, AOL, Huffington Post, and other media assets with an eye towards competing with companies like Google and Facebook. Verizon Media also owns tech sites Engadget and Tech Crunch.
There could still be money to be made for the investor. Verizon Media products have a combined 900 million monthly users and earned $7 billion in revenue last year. (Of course, that’s revenue, not profit.)
What makes these products valuable to investors is the data the companies collect on their email users. Apollo bought Shutterfly and Snapfish back in 2019 and have invested in Redbox, ADT, Cox Media, and the University of Phoenix.
Users of AOL and Yahoo mail are unlikely to notice any immediate changes.