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Verizon sells AOL, Yahoo for $5B

Verizon announced on Monday that it will sell its media group to a private equity firm for $5 billion.

CNBC reports that while Verizon is selling media properties like Yahoo and AOL to Apollo Global Management, it will retain a 10 percent ownership stake of the new company, which will be rebranded as Yahoo.

Verizon had intended to turn its media properties into competitors for Google and Facebook, with Yahoo and AOL merged into one media division called Oath by former AOL CEO Tim Armstrong. However, the venture ultimately failed to gain momentum and Armstrong left the company in 2018. CNBC notes that Guru Gowrappan, who took over after Armstrong left, will stay on under Apollo.

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“We are excited to be joining forces with Apollo,” Gowrappan said in a statement. "The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform."

The sale further indicates Verizon's intention to move away from media in order to focus on its wireless network and internet provider business. Verizon sold HuffPost to BuzzFeed last year and sold off Tumblr.

"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," David Sambur, senior partner and co-head at Apollo said in a statement on Monday.

Verizon bought AOL for $4.4 billion in 2015 and Yahoo for $4.5 billion in 2017, so the sale announced on Monday indicates a steep drop in valuation for the companies.

Verizon and Apollo said they expect the sale to be finalized by the second half of 2021.

— Updated at 8:44 a.m.