Verizon takes $5BILLION hit as it sells Yahoo and AOL for $5bn to private equity firm Apollo that just forced boss out for paying Jeffrey Epstein $158m

 Verizon is set to sell internet pioneers Yahoo and AOL to the private equity firm Apollo Global Management in a deal worth $5 billion.  

It is selling both companies at a considerable loss, having previously bought them for almost $10 billion in a bid to compete with the likes of Google and Facebook.

The purchase comes after Apollo co-founder Leon Black stood down as chairman earlier this year after it was revealed he paid $150 million to disgraced child trafficker Jeffrey Epstein.  


An investigation by Apollo found 'no evidence that Mr Black was involved in any way with Mr Epstein's criminal activities at the time.' 

However, the report did reveal that Black paid Epstein an astonishing $158 million in fees for services. 

Verizon is selling its media assets as it takes a renewed focus on rolling out 5G mobile networking. 

The latest sale also includes Verizon's advertising technology business.  

But Verizon will keep a 10% overall stake in the new company, which will now be known as Yahoo and led by CEO Guru Gowrappan.   

Leon David Black (born July 31, 1951), former-CEO of private equity firm Apollo Global Management, speaks during the Milken Institute Global Conference in Beverly Hills, California

Leon David Black (born July 31, 1951), former-CEO of private equity firm Apollo Global Management, speaks during the Milken Institute Global Conference in Beverly Hills, California

The purchase comes after Apollo co-founder Leon Black stood down as chairman earlier this year after it was revealed he paid $150 million to disgraced child trafficker Jeffrey Epstein

The purchase comes after Apollo co-founder Leon Black stood down as chairman earlier this year after it was revealed he paid $150 million to disgraced child trafficker Jeffrey Epstein

After the news was announced, shares of Verizon Communications Inc., based in New York, rose less than 1%. Meanwhile, Apollo's share price increased slightly by 0.23 per cent. 

The deal will bring an end to Verizon's flirtation with media production and advertising. 

Apollo is a private equity firm that owns the Venetian resort in Las Vegas and crafts retailer Michaels.  

In a statement, Apollo partner Reed Rayman said: 'We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands.

We have enormous respect and admiration for the great work and progress that the entire organization has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo’s growth in its next chapter.'

Hans Vestberg, chief executive of Verizon, said Apollo would provide the necessary resources and investment for Yahoo to grow. 

He added: '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.' 

Verizon's media companies incurred a $4.6bn devaluation in 2018 after experiencing 'increased competitive and market pressures...that resulted in lower than expected revenues and earnings.' 

The filing added: 'Those pressures were expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business.' 

The firm also 'achieved lower than expected benefits from the integration of Yahoo and AOl.' 

The sale further underscores Verizon’s decision to focus on expanding its 5G internet services, which covered 230m people in more than 2,700 cities as of December last year.

Verizon originally paid $4.4 billion for AOL in 2015 and another $4.5 billion for Yahoo two years later.

In 2019 Verizon sold Tumblr for an undisclosed sum that was thought to have been less than $3 million, a far smaller sum compared to the $1.1 billion Yahoo paid for the blogging platform in 2013. 

Last year Verizon sold Huffpost to Buzzfeed, a property AOL paid $315 million for in 2011 that resulted in a $119 million charge to its quarterly earnings 'primarily related to the disposition of the HuffPost business.'

AOL and Yahoo were both internet titans during their heyday.  

At its peak, AOL had a market capitalization of more than $200 billion and Yahoo more than $125 billion.  

As part of the deal, Verizon is selling properties including Yahoo Finance, Yahoo Mail and the tech blogs Engadget and TechCrunch. 

Despite competing for ad revenue with tech giants, Verizon Media's revenue rose 10% in the most recent quarter from the year before, to $1.9billion. 

Financial firms have played an increasingly prominent role in traditional media as well in recent years, buying up newspaper chains and slashing costs.

Verizon will receive $4.25 billion in cash, preferred interests of $750 million and the minority stake.

The deal is expected to be completed later this year.  

Among the most notable companies Apollo has an investment in are ADT, CareerBuilder, Cox Media Group, Intrado, Rackspace, Redbox, Shutterfly, Smart & Final, and University of Phoenix.

Apollo Global Management acquired digital retailer Shutterfly for 2.7b billion dollars in 2019.  

In the same year it snapped up Cox Media Group, a portfolio of radio and TV stations, for $3.1 billion. 

Verizon takes $5BILLION hit as it sells Yahoo and AOL for $5bn to private equity firm Apollo that just forced boss out for paying Jeffrey Epstein $158m Verizon takes $5BILLION hit as it sells Yahoo and AOL for $5bn to private equity firm Apollo that just forced boss out for paying Jeffrey Epstein $158m Reviewed by STATION GOSSIP on 10:14 Rating: 5

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