<p><img src="https://static5.businessinsider.com/image/5c49e9ec2bdd7f75b666eb16-1788/rtx47h9c.jpg" border="0" alt="Verizon CEO Hans Vestberg" data-mce-source="Reuters/Steve Marcus" data-mce-caption="Hans Vestberg"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Verizon has pulled back on its once-big media and advertising ambitions.</p><p>The telecom giant <a href="https://www.businessinsider.com/verizon-sells-aol-yahoo-to-apollo-global-management-5-billion-2021-5">just sold Verizon Media</a> to private-equity firm Apollo Global Management for $5 billion. The deal includes Techcrunch, Engadget, Yahoo, AOL, and Verizon's advertising technology.</p><p>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 <a href="https://www.businessinsider.com/verizon-will-write-down-46-billion-in-value-of-oath-2018-12">by $4.6 billion</a> and sold off media businesses <a href="https://www.businessinsider.com/huffpost-started-laying-off-staff-2019-1">including HuffPost</a>, Tumblr, and <a href="https://www.businessinsider.com/verizon-sells-mapping-service-mapquest-to-ad-tech-firm-system1-2019-10">Mapquest.</a></p><p>"The whole premise was flawedin 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."</p><p>But Verizon Media Group CEO Guru Gowrappan, who will continue to run the company under Apollo, sees it differently. He told Insider it was Apollo that approached Verizon for its media properties and the new ownership would invest in areas including:</p><ul><li aria-level="1">Editorial: It plans to hire and put resources into its websites including Yahoo Finance, TechCrunch and Engadget.</li><li aria-level="1">Commerce: This includes everything involving transactions, including sports betting, which Gowrappan said has grown 187% year-over-year. </li><li aria-level="1">Subscriptions: Yahoo said it had 3 million paying subscribers across AOL, Yahoo Finance Plus and TechCrunch's Extra Crunch.</li><li aria-level="1">Advertising: Gowrappan said advertising across areas like connected TV and digital out-of-home had attracted new clients and grown 45% year-over-year.</li></ul><p>"We've hit a junction point in a good wayat 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."</p><p>Still, the deal has insiders speculating about Yahoo's future under a private equity owner and discussing what went wrong under Verizon.</p><p>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. </p><h2>Insiders want more details about Apollo's media interests</h2><p><a href="https://techcrunch.com/2021/05/03/private-equity-firm-apollo-agrees-to-buy-verizon-media-assets-for-5-billion/">In an internal memo,</a> Verizon CEO Hans Vestberg played up Apollo's interest in Verizon Media's e-commerce initiatives and the sports betting subscription model.</p><p>"Apollo has a powerful vision that includes aggressively pursuing growth areas in commerce, content and betting," the memo read. "One that also features synergies with many of the traditional brick-and-mortar companies in their portfolio who can benefit from Media's e-commerce platform. What made Apollo's offer so appealing, is that it includes leveraging the entire Verizon Media ecosystem of adtech, affiliate relationships, data, insights, targeting and reach."</p><p>But some staffers worry about layoffs and cost cuts under Apolloa concern that some also long felt under Verizon's ownership. They said private equity firms' ownership of media companies, including Apollo's<a href="https://www.washingtonpost.com/business/2019/11/08/gannett-merger-nears-completion-union-claims-deal-threatens-journalism/"> financial backing of Gannett</a>, has led to unease about sharp cost cuts.</p><p>"What I'd like to hear from our new owners is a dedication to the pursuit of aggressive journalism, or a plan to divest its newly purchased journalistic assets to owners who do care about that mission," said a reporter at a Verizon-owned publication. "We're figuring this all out as a teamwe're pretty tight-knit, but also just one piece of a company that hit a nearly $8 billion run rate last quarter."</p><p>A second current staffer said that Verizon Media employees were assured after the acquisition that pay and bonus structures would stay put for the next yearbut that it's not clear that there won't be layoffs. Verizon Media Group confirmed that employees' salaries would be protected for one year. </p><p>"The main question is what Apollo wants to do," this person said.</p><p>Chatter about spinning off Verizon Media has churned for years. One former employee said that senior editorial staffers might be more optimistic about the sale because they've been more exposed to Verizon Media management than junior staffers are.</p><p>"They've been banging their heads against the wall dealing with Verizon management, while regular writers are more nervous because they don't know what this means for them," said the former employee.</p><p>The second former employee said that Verizon kept increasing media websites' traffic and other goals, even as it enacted hiring freezes and sometimes didn't replace people who left. But a private equity owner may not be the outcome they hoped for.</p><p>"I'm really worried for my friends that work there," this person said. "As far as I understand, they [PE firms] come along, suck up the profits, and spit you out."</p><h2>Advertisers gave up on Verizon's data pitch</h2><p>Like other telecom giants, Verizon wanted to pitch advertisers data about its users like their location or what apps they use most. AT&T and Singtel have also tried building an advertising and media business.</p><p>But like other telcos, Verizon faced privacy concerns about the use of consumer' data. AT&T reportedly <a href="https://www.businessinsider.com/att-reportedly-selling-xandr-walmart-singtel-could-be-buyers-2020-9">sought a buyer</a> for its adtech business last year.</p><p>"The person making 90% of revenue is concerned that the side of the business making 5% of revenue could blow it up," said GroupM's Weiser. "That pressure is dominant in telcos."</p><p>A second ad executive at a large holding company who spoke on the condition of anonymity said that Verizon's focus under CEO Hans Vestberg is on its core telecom business and that advertisers have stopped asking for granular telecom data. The ad exec theorized that Verizon's ad business could grow under private-equity ownership, though.</p><p>"Verizon bought [AOL and Yahoo] as two struggling brands, combined them, and then they had a strategic shift," the source said. "These brands are not unprofitable, but compared to Facebook and Google, they're not performing anywhere near those assets."</p><p><a href="https://www.businessinsider.com/what-went-wrong-at-verizon-media-and-sale-to-apollo-2021-5#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-parasite-delivered-one-of-the-best-twists-in-cinema-2020-2">What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence</a></p> Click here to read full news..