Verizon Communications is reportedly mulling the sale of its media assets including Yahoo and AOL. Citing its sources, the Wall Street Journal reported that private equity firm Apollo Global Management is leading the deal that is worth approximately US$4 billion to US$5 billion. MARKETING-INTERACTIVE has reached out to Verizon for comment.
Verizon acquired AOL in 2015 for US$4.4 billion to drive its LTE wireless video and OTT strategy. A year later, Verizon announced the acquisition of Yahoo for approximately US$4.83 billion. The acquisitions were meant to accelerate its revenue stream in digital advertising and place the company in "a highly competitive position" as a global mobile media company, former CEO Lowell McAdam previously said.
When the Yahoo acquisition was finalised in 2017, Verizon combined it with AOL to form Oath led by former CEO Tim Armstrong. The Oath portfolio included HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, BUILD Studios, Yahoo Finance, and Yahoo Mail, among others. Oath was expected to hit an annual revenue of US$10 billion but the business fell short of expectations, WSJ reported. In 2018, Verizon booked a US$4.5 billion accounting charge related to Oath, a sign that its gamble on Internet properties had not panned out well, WSJ said.
Oath was later rebranded to Verizon Media in 2019 and that same year, it sold blogging platform Tumblr to WordPress owner Automattic. Verizon Media also reported a 7.2% year-on-year revenue dip in the first quarter of 2019 and a 2.9% YoY dip during Q2 2019. In Q4 2019, Verizon Media posted a revenue of US$2.1 billion, nearly flat YoY but still signified a meaningful improvement from the decline reported at the beginning of the year.
The business unit, however, was impacted early in the first half of 2020 due to COVID-19, posting a 4.0% YoY revenue dip to US$1.7 billion in Q1 2020 and a 24.5% dip in YoY revenue to US$1.4 billion the second quarter. It has since bounced back, posting a 10.4% YoY increase in revenue for Q1 2021 to US$1.9 billion. According to the company, this marked the second consecutive quarter of double-digit year over year growth for Verizon Media and this was fuelled by strong ad trends growing 26% YoY, as well as revenue from owned and operated platforms growing 13% YoY.
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