Verizon announced on Monday it was selling internet stars Yahoo and AOL to a private equity firm for $5 billion, ending the online media ambitions of the telecoms giant.

 

 

 

The deal with Apollo Global Management also includes the entire Verizon Media unit, including the advertising tech operations of the two brands.

 

Verizon will retain a 10 percent stake in the company, which will be known as Yahoo going forward and will continue to be led by chief executive Guru Gowrappan, the company said in a statement.

 

Verizon acquired Yahoo in 2017 for some $4.5 billion, ending the run for one of the storied brands of the early internet. It merged Yahoo into its division with AOL, another star of the early internet era, which Verizon acquired in 2015.

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Both AOL and Yahoo lost traction and lofty market valuations as internet users shifted to newer platforms such as Google and Facebook.

 

Verizon had been seeking synergies from Yahoo’s massive online presence and its other media operations including news websites TechCrunch and the recently sold Huffington Post.

 

With Google and Facebook dominating the online ecosystem, “Yahoo didn’t do things well and Verizon wasn’t able to do much with it,” said Roger Kay, analyst at Endpoint Technologies Associates.

 

“Yahoo was a fully formed entity with its technology, and Verizon couldn’t make a bird into a fish.”

 

Kay said it will remain difficult to break the ad-tech “oligopoly” of Google and Facebook, and that prospects were uncertain for the new Yahoo.

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“It may be (Apollo) will try to extract something, and put it back on the market,” Kay said.

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