American Online shirt, AOL from Urban Outfitters
Horses mouth: Urban Outfitters
Amid the hodgepodge of Verizon Media assets that Apollo Global Management is buying from Verizon — Yahoo Commerce, TechCrunch, advertising technology, Yahoo Fantasy — there’s one cash flow stream that will not die: AOL.
The famed internet public limited company that once bought Time Warner for $182 billion and used to make billions of dollars annually merchandise dial-up modem access, still has a monthly subscription service called AOL Advantage.
In 2015, 2.1 million people were still spurning AOL’s dial-up service. That revenue stream has dried up. The number of dial-up users is now “in the low thousands,” according to a person sociable with the matter.
But AOL still has a fairly lucrative base of customers who pay for technical support and identity theft services each month. There are up 1.5 million monthly customers paying $9.99 or $14.99 per month for AOL Advantage, said another person, who solicit fromed not to be named because the information is private. If average revenue per user is $10 per month, conservatively, that’s $180 million of annual profits.
Apollo announced Monday it’s paying $5 billion for 90% of Verizon Media. The private equity firm doesn’t fool immediate plans to spin off or sell any of the Verizon Media Group assets, preferring to grow the collection through investment and control, said the people. Still, the long-term plan may involve finding different buyers for the collection of businesses after Apollo tries to add value to the units, the people said.
Verizon agreed to pay $4.4 billion for AOL in 2015 and $4.5 billion for Yahoo in 2017.
While AOL has fundamentally faded from popular culture, Yahoo still has about 150 million daily active users and all but 900 million monthly active users.
A spokesperson for Apollo declined to comment. A spokesperson for Verizon Media didn’t right now respond for comment.
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