Verizon Communications Inc. (NYSE:VZ) is in talks with potential buyers to divest its Huffington Post, which is acquired through the takeover of AOL in 2015. However, the discussions are in the early stage. A group of publishers such as Arianna Huffington has formed the liberal news site – Huffington Post in 2005. AOL took over Huffington Post in 2011 for $315 million. Huffington Post conducts business in several nations across the world through licensing accords. However, it has closed the German edition in March 2019.
Verizon is slimming down the dot com business family, which it amassed through the takeover of AOL and Yahoo. The company has written off assets worth $5 billion of Yahoo and AOL in early 2019.
Verizon has created a media business by merging Yahoo and AOL and the properties of Tumblr. The company acquired Yahoo for $4.5 billion in the year 2017 and AOL for $4.4 billion in 2015. The former chief executive officer of AOL, Tim Armstrong, said the amalgamation would form the best consumer media company.
The digital media groups failed to meet the expectations and struggling since the takeover. Facebook and Google have grabbed the online advertisement revenues and causing a loss for Verizon’s media group.
The digital media groups are undergoing a lot of consolidation. The newsrooms at Vox, Vice, BuzzFeed, and HuffPost, have witnessed job cuts. Vox purchased New York Media, Group Nine acquired Pop Sugar, and Vice Media bought Refinery29 in September 2019.
Verizon books loss in the sale of Tumblr
Yahoo acquired the social network – Tumblr, for $1.1 billion in 2013. Verizon sold Tumblr for a nominal amount of less than $20 million in August 2019 to Automattic Inc. Following the decision of Verizon to ban pornography on Tumblr, its mobile user count declined by 33% in the previous quarter. Matt Mullenweg, Chief Executive Officer of Automattic, has no plans to ban the adult content on Tumblr.
Verizon removed 800 employees working in the media group in January 2019. The new chief executive officer of Verizon, K Guru Gowrappan would focus on video and mobile-focused products to revive the growth. Verizon would focus on creating video content for third-party sites – Roku and its media sites like Yahoo Finance.