** FILE ** The Yahoo tent at the Consumer Electronics Show (CES) is seen in Las Vegas in this Jan. 7, 2008 file photo. Yahoo Inc.'s board reportedly called a special meeting Friday to discuss the slumping Internet pioneer's first response to Microsoft Corp.'s week-old takeover bid, setting the stage for a quick resolution or months of acrimonious wrangling. (AP Photo/Paul Sakuma, file)

Verizon Communications has revealed that it’s offloading Yahoo and AOL to private equity firm Apollo Global Management for $5 billion, around half of what it paid for the two properties.

Verizon will retain a 10 percent stake in the company, which will be known as Yahoo at the close of the transaction and which will continue to be led by chief executive officer Guru Gowrappan.

The sale will include the whole of Verizon’s media arm, also encompassing its advertising business, and is widely being viewed as a sign that the mobile phone giant is giving up on its media dreams.

“Verizon Media has done an incredible job turning the business around over the past two-and-a-half years and the growth potential is enormous,” said Hans Vestberg, CEO of Verizon. “The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.”

Gowrappan added: “With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform. This transition will help to accelerate our growth for the long-term success of the company.”

Verizon paid $4.4 billion for AOL in 2015 and $4.48 billion for Yahoo two years later. But recently, it has struggled with the properties due to Google and Facebook — as well as Amazon — hoovering up digital ads, which has weighed on many media companies struggling.

Reed Rayman, private equity partner at Apollo, said: “We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms.”

Apollo’s other assets include the Venetian resort in Las Vegas.

 

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