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It appears that Verizon Media Group wants to sell Huffpost in a rough year for US-based internet media companies.
HuffPost is apparently on its way out of the Verizon media group. Sources indicate that Verizon has already started pitching the idea of a potential sale to buyers who may be interested in acquiring the internet media organization. Although officials from Verizon declined to comment on the issue, this move amidst others indicates a shift of focus for the US-based communications company which comes as Verizon’s media arm seems to be sliding down in value.
About a month ago, Verizon wrote down its losses in about $1.3 billion after selling Tumblr for “well below $20 million” to WordPress.com owner Automattic. This comes after a significant devaluation of about $5 billion the AOL and Yahoo which the organization had bought for a combined $9.9 billion earlier in the decade (AOL for $4.4 Billion in 2015 and Yahoo for $4.5 Billion in 2017).
These alone may have been what caused the organization to double down on its holdings and figure out which assets to keep and which ones to sell. Already, the media holdings of the communications company had started reducing operating costs due to the low cost to revenue margins. It had already laid off about 800 workers which are about 7% of its workforce among its staff with some who worked directly at HuffPost and also closed down the German unit of the internet media firm.
Internet Media Firms are Struggling
While the above-described scenarios may seem like Verizon Media’s assets are the only ones in trouble, internet media firms that are without a core userbase are also having their share of troubles too.
Vice which at the height of the market bubble had a valuation of $5.7 billion had a total write-down by Disney a few months ago. HelloGiggles was also acquired by Time Magazine recently. The big guns in the internet media sphere (Vice, Buzzfeed, Vox and so on) have had to cut down on their human resources in the past year and a half.
This is indicative of a shift where the internet media giants are paving way for niche-oriented publications that are still going strong as opposed to pop-culture based media whose content was generally entertaining but didn’t fill specific needs.
Started in 2005, by Arianna Huffington from which the firm derives its name, the media firm began with a couple of celebrity bloggers who covered mainly Libertarian topics which gave them a focus and a loyal readership which propelled them quickly to the top.
Huffington Post was acquired by AOL for $315 Million in 2011 and became part of the Verizon family following the 2015 acquisition of AOL by Verizon. HuffPost has a global reach in more than twelve countries and operates in these locations through local partners on the ground.
Verizon (VZ) stock is trading for $61.05 (at official close on October 18) and its pre-market price is 61.21 which indicates a 0.26% growth. Just for comparison: a year ago, it was trading for approximately $55.