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Apollo’s $ 5 billion bet on Yahoo aims to go beyond advertising

(Bloomberg) – Apollo Global Management Inc.’s $ 5 billion deal for the media unit of Verizon Communications Inc. will create a new entity dubbed Yahoo, and as the name loses its exclamation mark, the new owners are enthusiastic about the business. Opportunities. With Yahoo, Apollo gets AOL, TechCrunch, Ryot, Built By Girls and Flurry. Guru Gowrappan, who headed the Verizon division, will be chief executive of Yahoo. Verizon will retain a 10% stake in the company. Apollo partner Reed Rayman said he hopes to take these primarily advertising-focused media brands and expand them with new products such as subscription and sports betting. management, but Verizon, which was focused almost entirely on expanding its wireless business to 5G, couldn’t find enough patience or resources to make its media foray a success. Yahoo has around 900,000 users. of its messaging, sports and finance sites. And while that’s a wealth of consumer connections, Verizon has found that the connections aren’t very long-lasting. ‘Rough awakening’ If Apollo sees the general public online as a near-term victory, he “could be in a rude awakening,” said Joanna O’Connell, analyst at Forrester. “Relationships with consumers do not last forever in a vacuum. They must be nourished and developed. Rayman called Yahoo Finance the world’s leading financial site, but declined to provide details on the outlet’s growth plans, which could range from stock trading to investment services. “We are looking at a wide range of business initiatives and products that can really capitalize on its scale,” he said. Apollo also sees opportunities beyond the reputable properties of Yahoo Finance and Yahoo Sports. used mail around the world, ”Rayman said. “There are a lot of things here that excite us. It wasn’t a thesis to buy a lot of things just to get one or two things. Apollo made his debut in the 1990s as a so-called vulture investor led by co-founder Leon Black. The targets were declining businesses and struggling assets. Today, its list of investments makes it a global conglomerate involved in a range of industries, including insurance, technology, manufacturing and TV channels, Verizon, which reduced the value to 4.5 billion dollars of media unit, will turn away from a distracting and unprofitable source. with $ 5 billion he can use to help pay off his debts. Apollo has a few options, said Roger Entner, analyst at Recon Analytics. . “These guys will likely apply tender, loving attention to employee numbers and the bottom line and sell the best parts.” No merger and acquisition plan Rayman said there is no immediate merger and acquisition plan for Yahoo. “It’s an iconic asset and we have to make sure we do it. It’s true,” he said. Apollo has been involved in media exclusions before, like Cox Communications Inc. which sold to the company its TV channels in 2019 but keeping a minority stake, similar to Verizon. Last year, this also attracted Alphabet Inc. to buy a stake in home security company ADT Inc., an Apollo portfolio company that it went public in 2018, and Apollo may have a manual for extracting juice from withered web assets. The company has acquired two former online photo giants, Shutterfly and Snapfish, and plans to combine them and There is a possible benefit for Verizon in a scenario like that, Cowen analyst Colby Synesael wrote in a note Monday. Apollo succeeds in rebuilding Yahoo and brings the asset back to the market as part of an off re initial public, “Verizon will participate in the upside through its 10% stake,” Synesael wrote. For more articles like this, please visit us at bloomberg.com to stay ahead of the curve with the most trusted source of business news. © 2021 Bloomberg LP

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