Apollo considers selling AOL, which may price the company at $1.5 billion.

Apollo Global Management Considers Selling AOL

Apollo Global Management, a prominent private equity firm, is reportedly exploring the possibility of selling AOL after receiving an unsolicited offer that values the company at about $1.5 billion.

The discussions are still in early stages, and it’s uncertain if they will lead to an actual deal. This information comes from sources familiar with the situation, according to a report from the Wall Street Journal.

As per the report, although Apollo has shown some interest in potential buyers, a formal bidding process has not yet been initiated. AOL is under the umbrella of Yahoo, which is owned by Apollo.

The Journal indicates that the $1.5 billion price tag is roughly four times AOL’s annual revenue, with the company generating close to $400 million before interest, taxes, depreciation, and amortization (EBITDA).

AOL may no longer be the powerhouse it once was, yet its main operations include privacy and security software, alongside the AOL.com portal and an email service.

Separately, Axios has stated that Apollo isn’t actively seeking to sell AOL. However, the firm has been drawn into discussions due to interest from potential buyers appreciative of AOL’s ability to generate cash.

Ismael Hishon-Rezaizadeh, CEO of Lagrange Labs, a New York tech firm, shared that “the story of AOL isn’t about nostalgia but about trust.” He emphasized the need for modern media brands to evolve, particularly in an age rife with misinformation.

“This involves authenticating content, spotting deepfakes, and ensuring services like AOL email remain secure from malicious threats,” he explained.

Despite wrapping up some older services, including dial-up internet, which is set to be discontinued soon, AOL’s finances still appear strong enough to attract bidders. Reports suggest that around 160,000 Americans were still using dial-up as of early 2023.

AOL’s journey began in 1985 as Quantum Computer Services before transforming into America Online in 1991, and later just AOL in 2006. Verizon acquired AOL for $4.4 billion in 2015 and then purchased Yahoo two years later for $4.8 billion, merging both into a division aimed at competing in the digital advertising space against giants like Google.

However, the Oath division, as it was initially called, was rebranded to Verizon Media and ultimately fell short of expectations, leading Verizon to write down half of its value before selling to Apollo.

AOL’s presence in popular culture is significant, with its iconic “You’ve Got Mail” greeting becoming a well-known phrase in the 1990s. Many people first accessed the internet through its widespread trial CDs, cementing its place in the digital landscape.