Yahoo sold again in new bid to revive its fortunes
Two pioneering web services of the internet age, Yahoo and AOL, have been sold again after the latest owner failed to revive their fortunes. US telecoms giant Verizon is selling its media assets, which include the two companies, to a US private equity firm in a deal worth $5bn (£3.6bn).
Verizon bought Yahoo in 2017 and AOL in 2015 for a combined $9bn.
Yahoo and AOL were once trailblazers, but were subsequently overshadowed by firms like Google and Facebook. Under the sale of the media assets to Apollo Global Management, Verizon will retain a 10% stake in the division.
Verizon bought the two brands in the hope of a quick entry into the digital advertising market, believing they still had enough resonance with consumers. Yahoo and AOL were pioneers in offering a wide range of free and informative web services to consumers, long before Google came into existence.
By providing free web mail and chat messenger services, the two firms had a cornerstone for online advertising on the market, as most internet users in the early 2000s were accessing their websites and software on a daily basis.
Yahoo also provided everything from the news, weather reports, sports results and movie release dates; to message boards, its own version of eBay – Yahoo! Auctions – and real-time markets data.
But over the last decade, Yahoo and AOL have faced an uphill struggle against more powerful rivals like Google, Bing, Facebook, Twitter, ESPN, Fandango and Weather.com, due to a saturated internet market.
Verizon also made a mistake in failing to acquire Yahoo’s equity stake in Chinese e-commerce behemoth Alibaba, as well as Yahoo Japan, where Yahoo! Auctions is still thriving.
Apollo says there is still a considerable opportunity to build the two brands into a digital media and online advertising powerhouse.
“We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands,” said Reed Rayman, private equity partner at Apollo.
“We have enormous respect and admiration for the great work and progress that the entire organisation has made over the last several years.”
David Sambur, co-chief of Apollo, added: “We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms.”
Verizon bought Yahoo to combine its search, email and messenger assets, as well as its advertising technology tools, with the AOL platform.
But the sale was overshadowed almost immediately after it was disclosed Yahoo had been subject to two massive cyber-attacks. Verizon eventually negotiated a $350m price cut for the acquisition.
However, today Yahoo’s homepage still commands a huge audience, as “netizens” check their Yahoo! Mail accounts.
The brand is considered to be one of the top news aggregators on the internet, and is the eleventh most visited website in the world, with 3.8 billion visits over the last six months, according to web analytics platform SimilarWeb.
The sale by Verizon comes after it disposed of blogging platform Tumblr in 2019 and news website HuffPost last year.