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Photo by AaronP/Bauer-Griffin/GC Images

Verizon on Monday announced that it will sell its digital media unit, including Yahoo and AOL, to private equity firm Apollo Global Management.

Details: Apollo will pay $5 billion for a 90% stake in the business, with Verizon retaining a 10% stake. It's a slightly higher price than what was expected, but still far short of the $9 billion that Verizon paid to acquire the businesses.

  • Verizon had previously sold former Yahoo properties HuffPost (to BuzzFeed) and Tumblr (to Automattic), but for nominal amounts.

Between the lines: Verizon CEO Hans Vestberg joined the company after the Yahoo purchase, and quickly let it be known that he wanted Verizon's growth to come from networking, not content creation.

  • Apollo, meanwhile, is one of very few big buyout firms to remain enamored with legacy media. It helped bankroll a 2019 merger involving newspaper publisher Gannett, and also bought up a bunch of TV and radio stations from Cox Communications.

History: Both the Yahoo and AOL acquisitions were meant to give Verizon lots of data so that it could sell targeted advertising against its media assets. AT&T, a rival phone company, tried to do the same thing with its acquisition of Time Warner's media assets in 2018.

  • It quickly became clear that the data-based ad play wouldn't work. Tim Armstrong, who was hired in 2015 to run the operation, left abruptly in 2018, and media group revenues were lower for this past quarter than they were in Q3 2017.
  • More recently, Verizon tried to lean into subscriptions, bundling together paid tiers of some of its flagship products, like Yahoo Mail and Yahoo Sports. It's likely that the little success they've experienced putting some of the few remaining Yahoo assets behind a paywall is what was attractive to Apollo.

Go deeper

Aug 10, 2021 - Economy & Business

Investment in digital media slows, years after venture-backed boom

Expand chart
Data: Pitchbook; Table: Axios Visuals

Media upstarts are attracting far less cash compared to the venture-backed media boom of 2014 and 2015, according to new data from Pitchbook.

Why it matters: Investors are no longer willing to shell out hundreds of millions of dollars on new digital media sites, given how long it's taken for some of those investments to materialize and drive major returns.

House passes $768 billion defense spending bill

Photo: Andrew Harrer/Bloomberg via Getty Images

The House approved a $768 billion National Defense Authorization Act (NDAA) for the 2022 fiscal year in a bipartisan 316-113 vote on Thursday.

Why it matters: The annual bill, which authorizes Pentagon spending levels and guides policy for the department, would require women to register for the military draft, among other provisions.

3 hours ago - Politics & Policy

Republicans’ secret lobbying

Illustration: Shoshana Gordon/Axios

The five Senate Republicans who helped negotiate and draft the $1.2 trillion bipartisan infrastructure bill have been privately courting their Republican colleagues to pass the measure in the House.

Why it matters: House GOP leaders are actively urging their members to oppose the bill. The senators are working to undercut that effort as Monday shapes up as a do-or-die moment for the bipartisan bill.