Verizon Communications, signaling that it has given up on its media business, said on Monday that it agreed to sell Yahoo and AOL to the private equity firm Apollo Global Management for $5 billion.
The sale includes Verizon’s advertising technology business as well, and the company will retain a 10 percent stake in the business, Verizon said in a statement announcing the deal on Monday.
The transaction is the latest turn in the history of two of the internet’s earliest pioneers. Yahoo used to be the front page of the internet, cataloging the furious pace of new websites that sprang up in the late 1990s. AOL was once the service that most people used to get online.
But both were ultimately supplanted by nimbler start-ups, like Google and Facebook, though Yahoo and AOL still publish highly trafficked websites like Yahoo Sports and TechCrunch.
The sale signals the unraveling of a strategy Verizon heralded in 2015 when it acquired the faded internet giant AOL for $4.4 billion. The purchase was meant to give Verizon a pathway into mobile, with the goal of using AOL’s advertising technology to sell ads against digital content. Verizon doubled down on that strategy in 2017 with its $4.48 billion acquisition of Yahoo, which it combined with AOL under the umbrella Oath.
But Google and Facebook have proved to be formidable competitors in the digital advertising market. Verizon acknowledged their might in 2018 when it wrote down the value of Oath by $4.6 billion, attributing the move in part to “increased competitive and market pressures” that had resulted in “lower-than-expected revenues and earnings.”
Still, the media business generates plenty of revenue. It recorded $1.9 billion in sales in the first quarter, a 10 percent gain over last year.