/Verizon Says It Will Sell Yahoo and AOL to Apollo: Live Updates – The New York Times

Verizon Says It Will Sell Yahoo and AOL to Apollo: Live Updates – The New York Times


Credit…Richard Drew/Associated Press

Verizon Communications, signaling that it has given up on its media business, said on Monday that it agreed to sell Yahoo and AOL to the private equity firm Apollo Global Management for $5 billion.

The sale includes Verizon’s advertising technology business as well, and the company will retain a 10 percent stake in the business, Verizon said in a statement announcing the deal on Monday.

The transaction is the latest turn in the history of two of the internet’s earliest pioneers. Yahoo used to be the front page of the internet, cataloging the furious pace of new websites that sprang up in the late 1990s. AOL was once the service that most people used to get online.

But both were ultimately supplanted by nimbler start-ups, like Google and Facebook, though Yahoo and AOL still publish highly trafficked websites like Yahoo Sports and TechCrunch.

The sale signals the unraveling of a strategy Verizon heralded in 2015 when it acquired the faded internet giant AOL for $4.4 billion. The purchase was meant to give Verizon a pathway into mobile, with the goal of using AOL’s advertising technology to sell ads against digital content. Verizon doubled down on that strategy in 2017 with its $4.48 billion acquisition of Yahoo, which it combined with AOL under the umbrella Oath.

But Google and Facebook have proved to be formidable competitors in the digital advertising market. Verizon acknowledged their might in 2018 when it wrote down the value of Oath by $4.6 billion, attributing the move in part to “increased competitive and market pressures” that had resulted in “lower-than-expected revenues and earnings.”

Still, the media business generates plenty of revenue. It recorded $1.9 billion in sales in the first quarter, a 10 percent gain over last year.

Gregory Abel, now considered Warren Buffett’s heir apparent, appeared at Berkshire Hathaway’s annual meeting on Saturday.
Credit…Yahoo Finance/Via Reuters

For years, perhaps the biggest question that Warren E. Buffett has faced is who is in line to replace him as chief executive of Berkshire Hathaway, the conglomerate he built into a $631 billion colossus over more than 50 years.

The answer has finally emerged: Gregory Abel, the 59-year-old lieutenant who oversees Berkshire’s non-insurance operations.

“The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning,” Mr. Buffett, 90, told CNBC on Monday.

The admission confirms what many had suspected. Mr. Abel’s star began rising in 2008 when he was named chief executive of what was then called MidAmerican Energy, a power business that Berkshire bought eight years prior. Mr. Abel helped spearhead a series of acquisitions that turned the division — since renamed Berkshire Hathaway Energy — into one of America’s biggest utility companies.

Mr. Abel was named vice chairman of Berkshire in 2018, alongside Ajit Jain, the longtime head of Mr. Buffett’s vast insurance operations. Analysts and investors widely interpreted the move as signaling that both men were contenders to succeed Mr. Buffett as chief executive one day.

Charles T. Munger, Mr. Buffett’s longtime business partner, hinted at Berkshire’s annual shareholder meeting on Saturday that Mr. Abel might be Berkshire’s next chief. In response to a question about whether the company might become too complex to manage, Mr. Munger said, “Greg will keep the culture” — a task that Mr. Buffett has long stressed would be important for Berkshire’s future leader.

A worker at MTA, a maker of electronic components, in Codogno, Italy. Eurozone manufacturers have been reporting new orders.
Credit…Flavio Lo Scalzo/Reuters
  • The S&P 500 is poised for an upbeat opening when trading starts on Monday, and European indexes are higher, amid positive economic news in Europe and continuing inflation worries.

  • The Stoxx Europe 600 index was 0.2 percent higher, and the Dax in Germany gained 0.3 percent. In Asia, indexes ended the day lower.

  • In the United States, the S&P 500 futures were 0.3 percent higher to start the new month. The benchmark index closed out April with a 5.2 percent gain, the largest monthly gain since November.

  • Oil prices slipped lower, as did yields for Treasury 10-year notes. Markets were closed in London for a bank holiday, and trading overall was subdued as some countries marked the May Day holiday.

  • Investors may have inflation on their minds after the investor Warren E. Buffett spoke about the “red hot” economy on Saturday at the annual shareholders meeting of the company he runs, Berkshire Hathaway.

  • Mr. Buffett said the company had seen the cost of construction materials rising. “We’re seeing substantial inflation,” Mr. Buffet said.

  • Indeed, commodity shortages in several industries, including construction, are causing price increases, Alan Rappeport and Thomas Kaplan report in The New York Times. The stresses are the result of rising demand running up against supply chain disruptions and Trump-era tariffs.

  • Although the Federal Reserve has described the price increases as temporary and unlikely to spiral out of control, pressure on the Biden administration to intervene could grow as it seeks a $2 trillion infrastructure investment package, a price tag that could rise as the cost of building roads, bridges and electric vehicle charging stations increase.

  • European manufacturing companies are signaling “considerable increases in output and new orders,” according to the IHS Markit purchasing manager’s index report for April.

  • The seasonally adjusted index hit 62.9 points, the highest ever since the survey data become available in 1997, IHS Markit said Monday.

  • The news came after data on Friday that showed the eurozone economy fell into a recession in the first three months of the year. But economists, pointing to rising vaccination rates and loosening government restrictions, believe the rest of the year should show robust growth.

  • A trial will begin Monday in federal court in California pitting Epic Games, the company behind the popular Fortnite game, and Apple. Epic has sued Apple, saying it holds far too much control over developers through its App Store.

  • On Friday, jobs data for the month of April will be released by the Labor Department. A strong jump in hiring is expected as the United States economy continues to revive after the yearlong pandemic.

Apple and Epic Games, maker of the wildly popular game Fortnite, are set to square off on Monday in a trial that could decide how much control Apple can exert over the app economy. The trial is scheduled to open with testimony from Tim Sweeney, the chief of Epic, on why he believes Apple is a monopoly abusing its power.

The trial, which is expected to last about three weeks, carries major implications, Jack Nicas and Erin Griffith report in The New York Times. If Epic wins, it will upend the economics of the $100 billion app market and create a path for millions of companies and developers to avoid sending up to 30 percent of their app sales to Apple.

An Epic victory would also invigorate the antitrust fight against Apple. Federal and state regulators are scrutinizing Apple’s control over the App Store, and on Friday, the European Union charged Apple with violating antitrust laws over its app rules and fees. Apple faces two other federal lawsuits about its App Store fees — one from developers and one from iPhone owners — that are seeking class-action status.

Beating Apple would also bode well for Epic’s coming trial against Google over the same issues on the app store for Android devices. That case is expected to go to trial this year and would be decided by the same federal judge, Yvonne Gonzalez Rogers of the Northern District of California.

If Apple wins, however, it will strengthen its grip over mobile apps and stifle its growing chorus of critics, further empowering a company that is already the world’s most valuable and topped $200 billion in sales over just the past six months.

As the post-pandemic economic recovery ramps up, prices are going up on goods as varied as toilet paper, diapers and wood flooring — and the increases may soon be felt in consumers’ wallets.

Procter & Gamble is raising prices on items like Pampers and Tampax in September. Kimberly-Clark said in March that it would raise prices on Scott toilet paper, Huggies and Pull-Ups in June, a move that is “necessary to help offset significant commodity cost inflation.”

And General Mills, which makes cereal brands including Cheerios, is facing increased supply-chain and freight costs “in this higher-demand environment,” the company’s chief financial officer, Kofi Bruce, said recently.

These price increases reflect what some economists are calling a major shift in the way companies have responded to demand during the pandemic, Gillian Friedman reports in The New York Times.

Before the virus hit, retailers often absorbed the cost when suppliers raised prices on goods, because stiff competition forced retailers to keep prices stable. The pandemic changed that.

Office space for Instagram, which is owned by Facebook. Facebook has expandedn Manhattan. 
Credit…Gabby Jones for The New York Times

The people who profit off corporate America’s use of offices are trying to coax corporate America back to the office.

They have refined their sales pitches to play up air filtration systems, flexible lease terms and swing space and brokers are back in their own workplaces in force. They are acknowledging that some things have changed while also seeking to prove to their clients, and themselves, that the office will soon return to something close to what it was, Rebecca R. Ruiz reports in The New York Times.

With New York City set to reopen fully in July, and many companies expecting to summon workers back this summer and fall, those in commercial real estate are hoping that the rebirth they’ve tried to hasten may finally happen.

“We opened our offices as soon as we were allowed across the country,” said David Lipson, a vice chairman for Savills, a global brokerage firm. “If you’re in the office real-estate business, should you be comfortable getting too comfortable working from home?”

The industry, coming off a boom of continuous growth, has seen commissions fall off as vacancy rates have climbed to their highest levels in decades. Real estate executives, characteristically bullish on their prospects, are facing existential questions.

With 1.3 billion square feet of office space available across America’s top markets — and more now on the market in Manhattan than exists in all of Nashville, Orlando or San Antonio, according to the research firm CoStar — strains in rosy projections are showing.

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