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U.S. private equity group Apollo Global Management is about to acquire Yahoo and other multimedia assets from Verizon Communications, according to people familiar with the situation, as the telecommunications group focuses on its business. basic networking and in the deployment of 5G wireless technology.
The deal, in which Apollo would pay between $ 4 billion and $ 5 billion for the assets, could be announced as soon as Monday, people added.
It would mark a dramatic turn for the U.S. wireless operator, which spent about $ 9 billion between 2015 and 2017 acquiring Yahoo and AOL as anchor properties for an online media division. was known as Oath.
The strategy reflected a mindset that was once widely shared among the world’s largest telecommunications companies, which sought to benefit from an explosion in digital media consumption by becoming content owners rather than mere operators. network, or “dumb channels.”
Netflix and Amazon have built large online media companies to cater to consumer demand video demand, while media companies like Disney and ViacomCBS have rushed to adapt their businesses to changing consumer habits. the creation of transmission platforms own.
But in general, telecommunications companies have struggled to establish themselves as creators and owners of distributed programming through their networks and mobile cables.
Verizon’s struggles are not unique. Its biggest rival AT&T acquired Time Warner, owner of CNN, HBO and Warner Brothers, for about $ 85.4 billion about five years ago to build a streaming business capable of taking over Netflix.
So far, the strategy has been a mixed success. AT&T charged $ 15.5 billion to its pay-TV business in January as customers switched to cable and satellite streaming platforms.
Verizon also hoped to create a content and marketing platform that would allow it to compete with Google and Facebook. However, it failed to gain significant market share from its rivals, forcing it to reconsider the broader strategy, said one person with direct knowledge of the issue.
The sale of media assets further underscores Verizon’s decision to double the expansion of its 5G Internet services, which covered 230 million people in more than 2,700 cities in December last year.
Verizon incurred a $ 4.6 billion amortization in its media business during 2018, after brands “experienced increased competitive and market pressures. . . this resulted in lower-than-expected revenues and profits, ”the company said in a presentation.
“These pressures were expected to continue and have led to a loss of market positioning for our competitors in the digital advertising business,” the presentation added.
Verizon also “made lower-than-expected profits with the integration of… Yahoo and AOL,” he said.
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