from Hacker News

Verizon Sells AOL and Yahoo to Apollo for $5B

by mishftw on 5/3/21, 12:20 PM with 354 comments

  • by StratusBen on 5/3/21, 2:46 PM

    I'm really surprised that Yahoo Finance has not been spun out as an independent company at this point. I think as a stand-alone company it could easily be worth in the billions of dollars.

    Reportedly Yahoo Finance has revenue between $100M and $250M annually. With the increase in retail interest in investing it seems like a property that could have some growth potential behind it if they did things right and separate from Verizon.

  • by js2 on 5/3/21, 5:59 PM

    > For Apollo, it’s an opportunity to further invest in the digital media space — an industry it has already put money behind with deals for Shutterfly, Rackspace and Cox Media.

    Cox Media was my first employer (it was called Cox Interactive Media at the time), Verizon Media, my current employer.

    At the time, I was on the team that ran CIM's web farm which hosted the web presence for all of Cox Enterprises' newspapers, TV, and radio stations. It was a couple dozen Sun Ultras with content on NetApp filers.

    We ran the farm from Atlanta and connected to it over frame relay. We were colo'd in a datacenter in Sunnyvale. We were a few racks. Yahoo had a presence in the same DC. It was a room or two, PC's running FreeBSD and also quite a few NetApps.

    The biggest spike in traffic we ever saw was when the Starr Report was released.

    A couple years later, I was working for Loudcloud, now living in Sunnyvale. Visiting another datacenter, I recall seeing a bunch of exposed motherboards mounted in racks on simple trays. It was an early Google presence:

    https://commons.wikimedia.org/wiki/File:Google%E2%80%99s_Fir...

    Today, I work as part of the mobile tools team for Verizon Media. The product I'm responsible for is hosted in a combination of AWS and Verizon Media datacenters.

    In some ways, there's been a lot of changes over the years, but in other ways, not so much.

    What I used to run on Solaris, today I run on Linux, sometimes on a VM or in a container, but sometimes still on a dedicated server. What I used to code in Shell or Perl or C or Java, today I code in Shell or Python or C or Java or Go or JavaScript. What I used to package into RPMs, today I package into docker images. Databases are still databases. SQL is still SQL. Application servers and web servers are still application servers and web servers. The web is still the web. Input still can't be trusted. Buffers still overflow. Applications still crash.

    Same shit, different day.

  • by acheron on 5/3/21, 1:40 PM

    "My name is AOL Time Warner, king of kings. Look upon my works, ye mighty, and despair." Nothing beside remains.

  • by perardi on 5/3/21, 1:43 PM

    From the article:

    …“it agreed to sell Yahoo and AOL to the private equity firm Apollo Global Management for $5 billion.”

    They apparently paid $4.4 billion for AOL, and Yahoo they got for $4.48 billion.

    I have to say: only losing $5 billion while handling the decaying corpses of AOL and Yahoo is, weirdly, kind of a triumph. These are cursed properties, and bring only despair.

    Though I’m surprised they didn’t try to keep ahold of the sports bits of Yahoo, which are seemingly popular. (Perhaps that’s why they even managed to get $5 billion for…what does AOL do?)

  • by lbsnake7 on 5/3/21, 3:28 PM

    Can someone help me understand this from an investment perspective? AOL and Yahoo were worth a combined $400 billion in the 90s. Was investing in either of those companies essentially a fail? Were all those investors wrong or did they somehow recoup their investment through dividends and such over the last 25 years to justify that market cap?

    Currently the market is telling me that Facebook is a $900+ billion company. Will investors ever get $900 billion back?

  • by bdcravens on 5/3/21, 2:01 PM

    "This next evolution of Yahoo will be the most thrilling yet"

    I'm very skeptical about that claim.

  • by ksec on 5/3/21, 2:55 PM

    A headline with 5G but not a single mention of it in the article.

    If any insider from Verizon may be could help explain why their insistence on mmWave 5G for Phones. ( And Phone only, not fixed Wireless internet access ) It doesn't make sense to me when the spec (3GPP) were announced, doesn't make sense when Verizon actually announced it, and still doesn't make any sense when they are now up and running. Both from a technical and Economical perspective. It still baffles me.

    Or are they only doing it for the marketing? ( Which is worst because Apple have to specifically make mmWave antenna for iPhone. Although I would not be surprised if they have something like 802.11ay planned using the same antenna R&D. )

  • by throwaway088 on 5/3/21, 2:18 PM

    Before people go all ballistic, please remember that yahoo and AOL make $700 million from Mail and a billion dollars from search. AOL sells huge number of paid dialup based email accounts(for older people though). So the sale price is approximately two years of revenue. Apollo is getting it cheap!

  • by ogre_codes on 5/3/21, 11:08 PM

    This reminds me of the guy who traded a paper clip for a house... only in reverse. Every time these companies get traded, more gets added to the bundle and they sell for less money.

    Soon it’ll be Yahoo & AOL sold for an NFT of an illustration of a pile of used AOL CDs.

  • by ppetty on 5/3/21, 3:31 PM

    I used to work at Aol, and it doesn’t surprise me that some significant number of people still use dial up. Not because they’re “trapped” but because that’s the only choice in some parts of the country. According to Pew, 3% of us are on dialup & more than twice that use no ISP (maybe that 7% just uses their mobile access?).

    https://www.pewresearch.org/fact-tank/2013/08/21/3-of-americ...

    https://www.pewresearch.org/fact-tank/2021/04/02/7-of-americ...

    … I’m not sure, but it seems plausible that if 3% had to use dialup 100% of those are on Aol (who else offers dialup?). So there’s probably a lot of money to be milked from that cash cow; along with their other ad & publishing businesses.

  • by airstrike on 5/3/21, 2:56 PM

    My first reaction is that this is really good for everyone.

    For Verizon, as they aptly spun it, it allows them to focus on their core business. I'm not in Media or Telecom, but from the outside looking in, the synergies between those two segments aren't obvious.

    For Yahoo / AOL / Verizon Advertising, these can be repackaged into sets of assets that "make sense" so that they may be sold to strategic buyers and ultimately have a better home than being the ugly duckling in Verizon's portfolio.

    For Apollo, the benefits are obvious. There's probably lots of operational improvements to execute on, again due to the fact that Verizon was likely not really focused on these businesses. Presumably the fund will reap huge returns if they can deliver on these improvements and exit successfully and timely.

    –––

    EDIT: There is one more nuanced question I forgot to address: is this "really good" for the employees to? On an individual scale, probably not. I'm sure many people will be let go once Apollo is at the helm. But from a broader view, it is arguably "good" for everyone collective in the long run. Verizon really can't do much with the asset, so the alternative to selling is letting it wither away in the hopes of some miracle, with the more likely outcome being that Yahoo and AOL would become even worse shadows of their former selves with each passing day.

    Eventually people would be let go anyway and those businesses could be shut down unless some miracle strategic buyer (i.e. not a private equity owner) came along and bought them. But most strategic buyers are not comfortable buying bad operations and turning them around. They find it too risky, so that's usually a job left to financial sponsors like Apollo who are built for that. In fact, these days most PEs are not even interested in turning operations around because they also find it too risky—and sponsors learned they can make more than enough money by just being great at finding sub-scale / non-core assets, putting them together in a "platform" and selling them to another sponsor or exiting through an IPO.

  • by fumar on 5/3/21, 1:46 PM

    I can’t find information on how Apollo Group runs it’s PE portfolio. I assume they will eliminate costs and merge businesses where it makes sense. The press release mentions brick and mortar opportunities but Apollo doesn’t own major brands outside of Sprouts and GNC. It sounds like another miss for Yahoo again.

  • by oaththrowaway on 5/3/21, 2:06 PM

    Yahoo employee here... AMA

  • by soco on 5/3/21, 2:13 PM

    They definitely squeezed a better deal than with the sale of Tumblr last year (which went for 3 mere millions)

  • by nolok on 5/3/21, 2:29 PM

    > Verizon [...] combined [Yahoo] with AOL under the umbrella Oath.

    Starting years of confusion for people searching oauth and making a typo.

  • by EVa5I7bHFq9mnYK on 5/3/21, 6:06 PM

    I have my main mail domain linked to a yahoo mail address since 1997. If it goes down .. I'm seriously f**d.

  • by Animats on 5/3/21, 8:10 PM

    Good. Large companies should not both be in both transmission and content. It's a conflict of interest. Remember the "zero rating" issue for cellular.

  • by yalogin on 5/3/21, 1:49 PM

    This was never in doubt. Everyone knew this was going to happen. Are non tech companies really that foolish to think they can salvage a brand that was relevant 10 years ago and revive it? I have a feeling this is some kind of tax avoidance scheme. Knowing nothing about taxes and accounting I will let knowledgeable people correct me.

  • by jugg1es on 5/3/21, 3:49 PM

    As someone who came of age during the 90s, I am amazed at how little this story matters in terms of real-world impact now.

  • by moron4hire on 5/3/21, 2:27 PM

    I'll buy Yahoo. I got <checks wallet> $48.67. But when I buy it, I want to be CEO. Don't worry, you only need to pay me half of what you paid the previous CEO. I promise I will only devalue the company by half as much as any other selection for CEO you already have. Think of it! That's 4x the value!

  • by halfmatthalfcat on 5/3/21, 1:36 PM

    I worked at HuffPo right after AOL was acquired by Verizon and before AOL/Yahoo became Oath. During this time Arianna left; rumor was she was forced out or at the very least, her power was undermined/neutered by Verizon and she was unable to fulfill her vision.

    Shortly after was the 2016 election. It was very surreal to be working there, while everyone on the editorial staff was sure HRC was going to win and then Trump won, without the namesake leader at the helm.

    As time dragged on, it started to become obvious that Verizon was starting to extract as much value out of the acquired AOL web properties at the expense of quality/brand integrity. Then came subsequent layoffs and now HuffPo really is a shell of it's former self.

  • by musicale on 5/3/21, 11:59 PM

    How much debt does the new AOL/Yahoo owe to its buyout overlords?

    Hopefully they aren't planning to just drain hefty interest payments out of AOL/Yahoo until it goes bankrupt.

    It seems like Rackspace and Cox are doing OK though, so that is a good sign?

  • by bearcobra on 5/3/21, 8:22 PM

    I wonder how things would have gone had Microsoft been successful in its acquisition of Yahoo. The value of the Altaba assets don't make the offered price seem quite so crazy in retrospect.

  • by grumple on 5/3/21, 7:01 PM

    This could be a steal IF Apollo can fix the management and leadership issues at both companies. There's a real opportunity with both companies - both have pretty high revenues to only go for 5B. If you can cut down on operations cost OR use the ops cost to create more revenue, you can turn garbage to gold. They have a large number of engineers at both companies - I have to believe that with this number of engineers, you can find ways to make money if you get management under control.

  • by m4rtink on 5/3/21, 2:42 PM

    Does this include Yahoo Japan or is that already a separate entity? Yahoo is BIG in Japan, with Yahoo Auctions being what Ebay is in other countries.

  • by georgeecollins on 5/3/21, 6:21 PM

    Verizon held Yahoo / AOL for about five years, they were bought at different times. ATT bought Time Warner a little less than three years ago. I think it will take longer for them to give up on that, but I bet they will start selling it (in parts) in three to four years.

    I know people here are saying, but WB is valuable! It is, but they are doing a great job of tanking it.

  • by elliekelly on 5/3/21, 2:35 PM

    I wonder what Apollo's due diligence team found on Yahoo Answers that necessitated shutting it down in order to announce the deal.

  • by robomartin on 5/3/21, 10:54 PM

    Every time I hear news about Yahoo I think about Rocketmail [0].

    I've had email addresses on Rocketmail for a very long time. I always worry they will shutter this historically significant domain & email service.

    [0] https://en.wikipedia.org/wiki/RocketMail

  • by interestica on 5/3/21, 3:12 PM

    What part of this article or headline (or this sale in general) suggests "turning focus to its 5G network"?

  • by crmd on 5/3/21, 3:14 PM

    I hope this is the beginning of the end of phone companies expanding into being mass media companies.

  • by sjg007 on 5/3/21, 11:44 PM

    Would you buy AOL and Yahoo for $5? What is the thesis? Just how is Myspace doing these days? What do we think the opportunity is?

    One idea is the opportunity of @yahoo and @aol email addresses that people have maintained and DAUs.

  • by disordinary on 5/4/21, 12:56 AM

    AOL was a big brand name as a dial up provider right? Why didn't they just move into dsl, cable, fibre, mobile broadband, etc? It seems like they abandoned that business completely and moved into media.

  • by forgotmypw17 on 5/3/21, 9:29 PM

    As many nerds as there are who grew up on AOL, I'm surprised they haven't yet gotten together GameStop-style and bought AOL for themselves, to put into a nice retirement home. :)

  • by eric__cartman on 5/3/21, 2:10 PM

    I've been waiting for Yahoo to finally die for a decade now.

  • by nerdkid93 on 5/3/21, 1:39 PM

  • by halfmatthalfcat on 5/3/21, 1:31 PM

    I worked at HuffPo right after AOL was acquired by Verizon and before AOL/Yahoo became Oath. During this time Arianna left; rumor was she was forced out or at the very least, her power was undermined/neutered by Verizon and she was unable to fulfill her vision.

    Shortly after was the 2016 election. It was very surreal to be working there, while everyone on the editorial staff was sure HRC was going to win and then Trump won, without the namesake leader at the helm.

    As time dragged on, it started to become obvious that Verizon was starting to extract as much value out of the acquired AOL web properties at the expense of quality/brand integrity. Then came subsequent layoffs and now HuffPo really is a shell of it's former self.

  • by kolbe on 5/3/21, 2:21 PM

    Is this the final blow for Yahoo!'s finance API?

  • by 271828182846 on 5/3/21, 4:34 PM

    Repacked suprime mortgages all over again ...

  • by irrational on 5/3/21, 9:04 PM

    Wait, AOL is still around? What do they do these days? Does anyone here work for AOL?

  • by tmaly on 5/3/21, 5:28 PM

    I have had yahoo email addresses since the late 90s. What is going to happen now?

  • by spamalot159 on 5/3/21, 12:56 PM

    Why would Verizon want to keep a minority stake in Yahoo? Seems useless to me.

  • by kumarvvr on 5/3/21, 2:22 PM

    I still think Yahoo is not worth 5 billion. Sure, it makes some revenue from mail and ads, yahoo mail is essentially the AOL of our generation. Ppl hanging onto it and the new kids dont even know about yahoo.

  • by oaththrowaway on 5/3/21, 2:39 PM

    Yahoo employee. AMA

  • by Dylovell on 5/3/21, 11:52 PM

    welp, there goes $5B in US pay tax money.... and still no national fiber network.

  • by llacb47 on 5/3/21, 9:22 PM

    Apollo will bleed them dry.

  • by benpink on 5/3/21, 2:38 PM

    Ersidjdjdejsj

  • by ncmncm on 5/3/21, 2:04 PM

    In other news: somebody thought they were worth a positive number.