After a spate of disappointing acquisitions, Verizon Communications Inc. is now exploring a sale of Yahoo and AOL. This is likely to end a rocky era for the company as a media owner. The company’s bet on digital media has proved to be expensive and unsuccessful. People familiar with the development said that the sale could lead to a deal worth USD 4 to 5 billion. The sale process also includes Apollo Global Management Inc. Verizon paid around USD 9 billion in total to acquire websites that were once dominant. The company acquired Yahoo in 2017. Earlier to this in 2015, it acquired AOL.
Verizon aimed at resurrecting brands through these websites. The country’s largest wireless carrier was expecting a fillip to brands that lost traffic drastically but still had a strong base of account holders. Verizon reorganized the businesses under the leadership of former AOL Chief Executive Tim Armstrong in 2017. The combined division of Yahoo and AOL was termed as OATH. It intended to take on digital advertising powerhouses like Facebook and Google. Both Yahoo and AOL flourished during the age of desktop PCs. They managed to get ads but struggled to keep pace with competitors. The audience slowly shifted to mobile apps and they were left behind.
The digital media business of Verizon failed to meet the target. The company had set the target of USD 10 billion in annual revenue by 2020. Following which it cut jobs in the unit. In November, Verizon agreed to sell its HuffPost news division. The deal was sealed with BuzzFeed Inc. Following this, the company decided to sell the Tumblr blogging platform. The deal was seal with the owner of WordPress at a nominal amount. The business generated USD 7 billion of revenue last year. This was a downfall of 5.6 per cent from the previous year. The downfall was mainly because of the sharp advertising pullback amid the coronavirus pandemic. The business has picked up and logged two consecutive quarters of double-digit growth but Verizon has apparently decided to focus on streaming video services. This is because they can be bundled with its home-internet and wireless plans.
Jeffrey is acting editor in chief of AmazingNews24 with over seven years of experience in the field of online news under his belt. Jeffrey has worked with multiple media houses and is currently leading a team of journalists, sub-editors and writers through his entrepreneurial endeavours.