Bedminster's Verizon scraps Yahoo, AOL for $5bn, admits defeat over online ad space

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Bedminster's Verizon scraps Yahoo, AOL for $5bn, admits defeat over online ad space

Verizon Communications Inc., the second-largest US wireless network operator, headquartered in Bedminster, New Jersey, had agreed to jettison its money-draining media businesses such as Yahoo and AOL for a lump-sum of $5 billion, nuking the leftovers of a bunch of big-budget and ill-starred businesses in a lucrative internet media and advertising industry.

In point of fact, latest move from Verizon to root out iconic brands likes of Yahoo and AOL came forth as the New Jersey-based telecom titan was vying to vent out a way towards profitability in a fiercely competitive internet advertising space, largely dominated by Google LLC alongside Facebook Inc.

Nevertheless, Verizon invested billions of dollars over more than a decade to fend off its internet brands in a bellicose advertising market landscape, however, was eventually forced to part ways, a Wall Street Journal report published earlier on Monday had unveiled.

Verizon to divest Yahoo and AOL for $5 billion

Besides, under financial terms of Verizon’s divestiture deal for Yahoo and AOL, the New Jersey-based telecom tycoon would receive $4.25 billion in cash from Apollo Global alongside a $750 million in preferred interests and a 10 per cent stake in Yahoo and AOL, barely half of what Verizon had laid off for the businesses, since it had written $4.6 billion off the units back in the 2018s.

Nonetheless, media headlines had unveiled late in 2019, before the onset of pandemic outbreak, that Verizon had been seeking potential buyers for Yahoo Finance, while several industry analysts had valued the unit alone at $2 billion.

On top of that, aside from a $4.4 billion takeover of email service AOL back in 2015s, Verizon spent more than $4.5 billion in 2017 over expectations that its 1 billion-plus user-base could be a productive space for online ads.