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Comment by perardi | Hacker News Reader

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?)

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Doubtful that they lost money. The company has probably returned some profit over all these years. They got a huge tax benefit from the 2018 write-off, $1BN from selling the Yahoo buildings to Google, and now $5BN from selling 90% of it.

That reminds me of the movie Frequency, in which the characters can use a ham radio to talk across time. A person from the future gives a cryptic hint to the person in the past by telling him to pay attention to "yahoo". In the ending scene of the movie, the younger man's fancy car bears a license plate with that name.

It's funny to think that Yahoo was once thought of as an amazing stock tip to give someone. The movie came out in 2000 and was presumably written/filmed 1-2 years prior.

https://en.wikipedia.org/wiki/Frequency_(2000_film)

I'm also reminded of the famous line from You've Got Mail where the older lady bought Intel at $6.

https://smithhousedesign.com/18-years-later-10-ironic-things...

“I am very rich. I bought Intel at $6.”

Lots of gems in that whole article.

Maybe the advice from the future was to stay away from it?

AOL has adtech advertisers setup with some large customer base probably 3rd or 4th to Google/Facebook. It also owns publishers like HuffPost, TechCrunch etc.

I think Verizon Media is 5th after the big two, Amazon, Microsoft. Unless LinkedIn is separate from Microsoft.

Amazon is smaller than Verizon Media in this space. Microsoft and Verizon Media are not independent - Microsoft handles Verizon's search ads, Verizon handles ads on other Microsoft properties: https://about.ads.microsoft.com/en-us/solutions/ad-products/...

That said, single market players like TheTradeDesk or Xandr are larger in their own markets than verizon media, but probably not compared to the combined publisher and advertiser business: https://www.atlantic.net/vps-hosting/top-10-dsp-providers/

Ah interesting. Yeah, I’m not sure how a full proper ranking or comparison for digital ad market would be done. There’s lot of ad networks including the DSP list. Ad spend perhaps? Most of the major sites or apps that are only for their own property don’t include outside ads. I’m thinking LinkedIn, Pinterest, Snap, Twitter, Reddit, Yelp. I’m not certain on all of this though. Chumbox ads (Taboola, etc) have proliferated to a whole range of sites including top ones by now too.

But then IAC, Verizon Media’s biggest properties, would be a mix of different things.

Well when your large customer base leads you to a $5 billion writedown and a public confession that Google and Facebook are eating your lunch…

https://www.washingtonpost.com/technology/2018/12/12/verizon...

…color me skeptical that there’s a bright future there.

They had good customer base initially. AOL has done so many acquisitions for like Adaptv(video advertising platform), Millenial Media(mobile advertising) etc which were pretty successful. Later ofcourse Yahoo. Failure started coz they platform integration plan didn't work as expected. Lot of talent from the acquisitions left. They still use lot of old tech setup for advertising, web platforms. In summary, they failed in making a single platform from acquisitions they had.

Writing off $5B means a ton of money for Verizon. Right there we can see they already didn’t actually lose half of their investment spend.

Most people’s lunch is being eaten by the big two. Snap had to go with a different ads biz model to not directly compete with the big two.

It doesn’t stop Verizon Media, now Yahoo, from being the 5th or 6th biggest ad[tech] and online ads business. I’m hedging 6th in case there’s some one else between Microsoft and Amazon.

HuffPost was sold to Business Insider in 2020.

https://www.huffpost.com/entry/buzzfeed-to-acquire-huffpost_...

Aah..my bad..I missed that..but that was vision(advertising + publishing) of AOL CEO Tim Armstrong..he was almost successful until Verizon acquisition and later Yahoo merger.

They didn’t lose that much money. The companies were profitable. They sold assets. If they lost money. It would be maybe $1B at most. I doubt that happened though. The tax write offs gave back a lot of money too.

I don't get how Apollo thinks they can make a profit from these zombie companies.

How long has it been since an acquisition of either one of those companies made the acquirer any money? More than a decade?

Apollo can be thought of as garbage disposal for tech companies.

They provide enough capital for a corporation to keep running while systematically stripping it down until only the most profitable core remains, then re-IPO'ing that husk of the company. Along the way, they make the most use of financialization to extract as much benefits as they can.

They serve a purpose in the ecosystem I guess. Its better than the company devolving into irrelevance or collapsing at once. Graceful termination means that everyone can wait for a ferry to take them away rather than jump ship.

Isn't Yahoo's value mostly their ownership stake in Alibaba?

That was not acquired by Verizon, but split off and sold. (Similarly shares in Yahoo! Japan)

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