A totally different celebration was likely going place just a few blocks down the street at Verizon’s official offices in Midtown when firework volleys launched out into New York City port Friday night.
After failing to compete with internet giants, Verizon is selling its media companies, including Yahoo and AOL, to private equity company Apollo Global in a $5 billion deal expected to finish in the second half of this year.
Z Holdings Corp, a subsidiary of SoftBank, announced on Monday that it has agreed to pay Verizon Communications Inc 178.5 billion yen ($1.61 billion) in order to secure the rights to Yahoo branding and technology in Japan in perpetuity.
SoftBank’s online assets in Japan are owned by Z Holdings, most notably Yahoo Japan, whose web portal remains the country’s most visited news website. Yahoo Japan paid a regular payment to Verizon Media (previously Oath, previously AOL + Yahoo) for the rights to use the Yahoo brand name and associated technology in Japan under its most recent arrangement. In exchange for a one-time upfront payment, certain royalties will no longer be paid.
Verizon paid $9 billion for Yahoo in 2017 and AOL in 2015. Yahoo and AOL were formerly market leaders, but have since been eclipsed by companies like Google and Facebook. Verizon will keep a 10% share in the media sector after selling the assets to Apollo Global Management.
The agreement will provide Verizon with considerable extra consideration as it seeks to reduce its debt load, which was accumulated as a result of a spending spree on wireless spectrum auctions, including as its $52.9 billion purchase of C-band spectrum earlier this year.
Despite Yahoo’s exit from the US market, the brand remains a key part of SoftBank’s domestic internet company, with the name appearing on a web portal and services such as shopping and weather.
SoftBank’s internet division, formerly known as Yahoo Japan, has relaunched as Z Holdings and is counting on services like PayPay and Line for growth in Japan and Southeast Asia. (1 dollar Equals 110.9800 yen)