Verizon Sells AOL and Yahoo

Posted on May 3, 2021 by Paul Thurrott in Cloud with 24 Comments

It's (Past) Time to Close That Yahoo Account

Verizon announced today that it will sell AOL and Yahoo to Global Management for $5 billion. The resulting company will be called Yahoo.

“We are excited to be joining forces with Apollo,” Verizon Media CEO Guru Gowrappan said. “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. This transition will help to accelerate our growth for the long-term success of the company.”

This transaction marks an ignoble end for AOL, formerly called America Online and once one of the most powerful media brands in the world. But even for Yahoo, which has also bounced between several owners as its influence waned, this isn’t a particularly satisfying outcome. These two companies once dominated the Internet, after all—Microsoft offered to acquire Yahoo in 2008 for $44.6 billion—but today they are just vestigial afterthoughts.

Mr. Gowrappan will continue to run the new company, which will also include Verizon’s advertising business. And Verizon will retain a 10 percent stake in the new company.

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Comments (24)

24 responses to “Verizon Sells AOL and Yahoo”

  1. bart

    Wasn't MS going to buy Yahoo! for $45B?

    • jchampeau

      You're correct. According to Reuters, Microsoft's bid for Yahoo was $44.6 billion in February 2008, which is just shy of $55 billion today, adjusted for inflation. Wow.

    • glenn8878

      Yet they bought Skype and Nokia.

    • MikeCerm

      To be fair, for Microsoft it might have actually made some kind of sense. Microsoft wanted a search engine and Yahoo still had some kind of presence in the search engine business, even if they were a distant 2nd place to Google. Microsoft launched Bing a year later, and maybe they could have saved a lot of hassle by just acquiring Yahoo and developing something from that. Yahoo Mail was also pretty big at the time, and combining that with Hotmail would have added greatly to Microsoft's marketshare. Whether any of that is worth $44 billion is certainly unclear.

  2. tghallin

    The sad thing is that 2 million people can only access the internet via dial up connection. Pre competition in telecom, there were universal service requirements. They still exist for wireline, but not for anything else.

  3. Gerald Michels

    I remember when AOL asked members to limit time on line because the demand was so high for access. I switched from AOL to Gmail a number of years ago. It will be interesting to see if existing AOL accounts will be preserved or changed to another system.

    • simard57

      Had the same thought. FIOS stopped hosting my verizon.net email and moved it to aol. will my verizon.net email find its way to aol still? I am glad I moved off verizon as my prime address when they stopped hosting it.

  4. yaddamaster

    Pretty sure it's not even worth 5 billion.

  5. Chris_Kez

    Is it too much to ask that Verizon, AT&T and T-Mobile just focus on being the best network carriers they can be? Get out of the content business. Be the best pipes you can be. You don't even have to be dumb pipes; be smart pipes! But focus on that and not on content and advertising and this ancillary stuff. And if they just can't help themselves, then perhaps we need legislation to re-orient them towards this mission.

    • jchampeau

      Shareholders expect growth. There's only so much money to be made in the "pipes." In order to continue to grow their top lines, they come up with new things to generate new revenue. Philosophically I'm with you because I'm in favor of net neutrality and all of the things it protects against, but in this corrosive and divisive political climate, FTC and DOJ breaking up the likes of AT&T and Comcast and telling them they have to shed all of the media businesses they've bought would be...uh...problematic. Simply restoring net neutrality rules with be a step in the right direction.

      • Chris_Kez

        How much growth should Verizon shareholders realistically expect? The US isn't growing very fast; cell phone penetration is already very high; there are three established competitors. This is basically a mature market. Shareholders should be looking for responsible stewardship and good dividends.

      • behindmyscreen

        I mean...Utility companies don't seem to have a problem just focusing on their central function....I think the cell companies have a culture of "innovation" from the telecom industry.

    • MikeCerm

      This is why they need to be broken up. Separate "the pipes" -- which should be a public utility, like water pipes, since it is the public who owns all wireless spectrum anyway -- from the for-profit businesses that transmit data over the pipes. This is how it works in a lot of countries. Rather than having 3 overlapping networks that each work better in some places than others, they have one network that covers the whole country, and then carriers just sell access to that network.

  6. siverwav

    Wow who is the sucker paying 5 billion?

  7. ringofvoid

    I suspect that they paid nearly 5 billion too much but... good for Verizon?

  8. jchampeau

    Not to be pedantic, but it was America Online. There was no "N." As a teenager, I surreptitiously mocked the "old" people who put the N on. Now I'm one of those old people.

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