Does Verizon Own Yahoo in 2024? The Complex History Explained
Yahoo, originally founded in 1994, is one of the longest standing internet giants. But over the past few years, the company has changed hands multiple times. Many consumers have wondered – does Verizon own Yahoo now in 2024?
The short answer is no. Private equity firm Apollo Global Management acquired Yahoo in 2021. However, Verizon did previously own Yahoo after an expensive and ultimately unsuccessful attempt to take on Google and Facebook in the digital advertising market.
So how exactly did we get to the current state of Yahoo‘s ownership? Read on for a thorough explanation covering Verizon‘s troubled history with Yahoo, who owns Yahoo today, and whether Verizon could attempt an acquisition again in the future.
Why Verizon Acquired Yahoo in 2017: A $4.5B Attempt to Compete in Digital Ads
In 2017, Verizon made the decision to purchase Yahoo‘s core business for a staggering $4.5 billion. At the time, Verizon had aspirations of transforming into a digital media powerhouse that could take on the dominant industry leaders.
“Verizon saw an opportunity to dive headfirst into digital media and take on Facebook and Google’s online advertising duopoly. The telephone provider paid handsomely for Yahoo and AOL in 2017 to combine forces on content creation and web services.” – Brian Fung, Technology Reporter at CNN
Specifically, some of the key reasons Verizon pursued Yahoo included:
- Compete with Google and Facebook: Verizon wanted to take on the digital advertising "duopoly".
- Leverage media assets: Combining AOL and Yahoo media properties to build an advertising business.
- Expand content creation: Creating more digital media content and web services.
- Reach mobile consumers: Tap into Yahoo‘s mobile reach. Over 600 million monthly mobile users.
The deal only included Yahoo‘s core digital media holdings such as:
- News, finance, sports content
- Email and messenger services
- Advertising technology
It did not include Yahoo‘s ownership stakes in Alibaba Group Holdings or Yahoo Japan.
So clearly Verizon had lofty goals with the Yahoo deal. But integrating a declining legacy web business would prove enormously difficult.
Verizon Struggles to Make Yahoo Deal Work: Business Declines Under Management
After the Yahoo purchase closed in June 2017, Verizon set out to integrate the company into its new Oath subsidiary – combining Yahoo with AOL. However, Oath struggled right out the gates.
| Year | Oath Digital Ad Revenue | Industry Ranking |
|---|---|---|
| 2017 | $7.5 billion | #4 |
| 2018 | $7.0 billion | #5 |
| 2019 | $6.4 billion | #5 |
"Verizon Media‘s brand value has declined under Verizon ownership according to valuations from Brand Finance. In 2019, AOL was worth $1.3B, a massive drop from the $3.4B Verizon paid for it in 2015. Yahoo’s brand declined from $3.4B in 2017 to $2.6B in 2019."
As seen above, Oath’s ad revenue declined during its first few years under Verizon – dropping billions in sales. And the brand valuations of AOL and Yahoo were nearly cut in half.
Rather than taking share from Google and Facebook, Oath was losing digital advertising market share. And in 2019 Verizon recorded a $4.6 billion write down on the media division – essentially admitting that they overpaid for the aging internet brands.
Some of the key struggles Verizon faced with Oath included:
- Declines in Yahoo‘s legacy display advertising business
- Unable to scale video and mobile programmatic ads
- Key executive departures after acquisition
- Missed revenue targets for online advertising
After just a few short years, it was clear Verizon‘s attempt to build an online media advertising business had largely stalled out.
Private Equity Firm Apollo Global Takes Over Yahoo in $5B Deal
In May 2021, Verizon announced plans to sell their Yahoo/AOL media assets to New York private equity firm Apollo Global Management for just $5 billion – a massive markdown from Verizon‘s combined $9.2 billion purchase price for the two companies.
The deal was viewed as Verizon‘s concession that they could not make the media brands work and were ready to exit the market – refocusing their attention instead on industries like wireless 5G networks where they have more competitive advantage versus technology giants.
Apollo had privately been studying a Yahoo investment for some time, as they still saw untapped potential and value in Yahoo‘s global brand recognition, high user traffic, and advertising infrastructure.
“Apollo believes the powerful base of core products at Yahoo creates short and long term options for growth and innovation, spreading across a variety of verticals and geographies." – Reed Rayman, Partner, Private Equity at Apollo Global Management
Apollo also indicated they may pursue bolt-on acquisitions for Yahoo to further expand its capabilities in areas like ecommerce and sports gaming.
The sale officially closed in September 2021 – marking the end of Verizon‘s turbulent ownership tenure and a new era for Yahoo under private equity management back to operating as a standalone company.
Will Verizon Attempt to Buy Back Yahoo in Future?
Given Verizon‘s disappointing time operating Yahoo, it seems unlikely at this point that the telecom giant would attempt to reacquire the media company anytime in the near future.
Verizon for its part seems ready to leave behind ambitions of competing with online advertising juggernauts Google and Facebook. Their failed Yahoo deal proved building a competitive media platform would require massive long term investments that may ultimately never pay off at scale.
By selling Yahoo, Verizon can wash its hands of the deteriorating traditional web brand and build its future growth plans around 5G wireless networks rather than content production.
That said, the rapid pace of change in digital media leaves open the possibility Verizon could develop renewed interest in future. Particularly as online video consumption and new formats like the metaverse continue accelerating.
For example, if Apollo Global proves successful revitalizing growth at Yahoo through acquisitions or expansion into ecommerce and online betting – it may prompt Verizon to reconsider the viability of media under operational strategies other than they previously employed.
But for now, Verizon seems happy be done with their media side adventure and to allow Apollo to forge a new path forward for Yahoo independently.
Conclusion
In summary, Verizon does not current own Yahoo, despite shelling out $4.5 billion acquire the company back in 2017. Ultimately integration issues and inability to scale advertising revenue versus Google Facebook forced Verizon to sell off their media assets to private equity firm Apollo Global Management in 2021.
While Verizon could theoretically attempt to reacquire Yahoo someday, the company appears committed to investing in core telecom services rather than engage in a rematch with powerful big tech adversaries on their home turf.
This complex saga involving Verizon and Yahoo underscores the immense challenges traditional web players face adapting to a marketplace increasingly dominated by the leading technology platforms. It takes world-class innovation across products, user experiences, and advertising formats to compete – advantages that lie solidly with the Facebooks and Googles of the world today.
