(Bloomberg) -- Verizon Communications Inc. agreed to sell its media division to Apollo Global Management Inc. for $5 billion, a move that will jettison once-dominant online brands like AOL and Yahoo.
The unit will be known as Yahoo after the close of the transaction, which is expected in the second half of this year, Verizon said in a statement Monday. Guru Gowrappan will remain chief executive officer of the media group. Verizon will keep a 10% stake in the business, it said, confirming an earlier Bloomberg News report.
With the sale, Verizon is unloading the remnants of an ambitious but distracting foray into online advertising. Last year, the telecom giant agreed to sell the HuffPost online news service to BuzzFeed Inc., and in 2019 it sold the blogging platform Tumblr.
The phone company's priority today is its wireless business and the construction of a multibillion-dollar network for advanced 5G services.
Verizon's investments in online advertising never really paid off. The company acquired AOL for $4.4 billion in 2015. Tim Armstrong, head of AOL, said at the time he wanted to build a “house of brands” at Verizon under a division dubbed Oath. In 2017, the company bought Yahoo!'s internet properties for about $4.5 billion, betting its 1 billion-plus users would be a fertile audience for online ads.
But in 2018, after Hans Vestberg took over as Verizon's CEO, the company wrote off more than $4 billion of its media holdings, or roughly half the value of those business, and renamed the division Verizon Media Group.
Verizon Media has more than a dozen online brands. The portfolio includes TechCrunch, Ryot, Built By Girls and Flurry, according to its website. The division had first-quarter revenue of $1.9 billion, up 12% from a year earlier, according to a filing.
Verizon shares were up 0.7% to $58.18 at 9:44 a.m. in New York. They have fallen 1.6% in the first four months of the year, compared with the 11% gain in the S&P 500 Index.
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