Summary List Placement
Verizon has pulled back on its once-big media and advertising ambitions.
The telecom giant just sold Verizon Media to private-equity firm Apollo Global Management for $5 billion. The deal includes Techcrunch, Engadget, Yahoo, AOL and Verizon’s advertising technology.
The sale marks a big strategic change for Verizon, which spent $9 billion to acquire AOL and Yahoo. Verizon hoped to use its telecom data to build an advertising and media powerhouse to compete with Google and Facebook. But Verizon since wrote down its media investments by $4.6 billion and sold off media businesses including HuffPost, Tumblr, and Mapquest.
“The whole premise was flawed — in the long term, you can’t use consumer data without the perception of violating consumer data,” said Brian Weiser, global president of business intelligence at WPP’s GroupM. “The end of this effort was always very clear.”
But Verizon Media Group CEO Guru Gowrappan, who will continue to run the company under Apollo, see it differently. He told Insider it was Apollo that approached Verizon for its media properties and the new ownership would invest in areas including:
Editorial: It plans to hire and put resources into its websites including Yahoo Finance, TechCrunch and Engadget.
Commerce: This includes everything involving transactions, including sports betting, which Gowrappan said has grown 187% year-over-year.
Subscriptions: Yahoo said it had 3 million paying subscribers across AOL, Yahoo Finance Plus and TechCrunch’s Extra Crunch.
Advertising: Gowrappan said advertising across areas like connected TV and digital out-of-home had attracted new clients and grown 45% year-over-year.
“We’ve hit a junction point in a good way — at some point, you start thinking that you can be 10X who you are today, but to do that, you need the right partner,” he said. “It’s a win for Verizon [because] they can focus on what’s core, it’s a win for Verizon Media Group because now you’re untethered from the Verizon core and can fight aggressively in some of these areas, and it’s a win for Apollo because the iconic products they get are one-of-a-kind in the sector.”
Still, the deal has insiders speculating about Yahoo’s future under a private equity owner and discussing what went wrong under Verizon.
Insider spoke with three current and two former Verizon Media staffers plus advertising experts about the telecom giant’s media and advertising ambitions. The current and former employees spoke on the condition of anonymity, citing fear of retaliation.
Insiders want more details about Apollo’s media interests
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Source:: Business Insider