Verizon Will Promote Yahoo and AOL to Apollo: Stay Updates

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Credit…Richard Drew/Associated Press

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

The sale also includes Verizon’s advertising technology business. Verizon will retain a 10 percent stake in the overall business, it said in a statement.

“This next evolution of Yahoo will be the most thrilling yet,” Guru Gowrappan, Verizon Media’s chief executive, said in a memo to employees Monday, which was obtained by The New York Times.

Mr. Gowrappan will continue to lead Verizon Media following the deal.

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

For Apollo, it’s an opportunity to further invest in the digital media space — an industry it has already put money behind with deals for Shutterfly, Rackspace and Cox Media. And it has plenty of experience with corporate carve-outs like Verizon’s media business.

Apollo is aiming to propel sales growth with an increased focus on the individual brands that it believes are lost inside a large corporate empire, which could include more premium subscriptions for Yahoo Finance or more sports betting and fantasy leagues as part of its Yahoo Sports business two Apollo executives told The New York Times in an interview.

Apollo is also notably upbeat about the prospect for digital advertising as it puts more money behind those efforts amid regulatory scrutiny of some of the biggest players, like Google. And as ads shift from offline to online post-pandemic, Apollo expects the overall industry to grow.

“Does most of that go to Google and Facebook and Snap and Twitter? Of course,” said Reed Rayman, a private equity partner at Apollo. “But, is there still a role for others in the digital media space to benefit from the rising tide, like Yahoo and the other properties? Absolutely.”

Former President Donald J. Trump has continued to deny the results of the 2020 presidential election.Credit…Erin Schaff/The New York Times

Facebook’s Oversight Board, an independent and international panel that was created and funded by the social network, plans to announce on Wednesday whether former President Donald J. Trump will be able to return to the platform that has been a critical megaphone for him and his tens of millions of followers.

The decision will be closely watched as a template for how private companies that run social networks handle political speech, including the misinformation spread by political leaders.

Mr. Trump was indefinitely locked out of Facebook on Jan. 7 after he used his social media accounts to incite a mob of his supporters to storm the Capitol a day earlier. Mr. Trump had declined to accept his election defeat, saying the election had been stolen from him.

At the time that Facebook barred Mr. Trump, the company’s chief executive, Mark Zuckerberg, wrote in a post: “We believe the risks of allowing the president to continue to use our service during this period are simply too great.”

Two weeks later, the company referred the case of Mr. Trump to Facebook’s Oversight Board for a final decision on whether the ban should be permanent. Facebook and the board’s members have said the panel’s decisions are binding, but critics are skeptical of the board’s independence. The panel, critics said, is a first-of-its-kind Supreme Court-like entity on online speech, funded by a private company with a poor track record of enforcing its own rules.

Facebook’s approach to political speech has been inconsistent. In October 2019, Mr. Zuckerberg declared the company would not fact check political speech and said that even lies by politicians deserved a place on the social network because it was in the public’s interest to hear all ideas by political leaders. But Mr. Trump’s comments on Jan. 6 were different, the company has said, because they incited violence and threatened the peaceful transition of power in elections.

On Monday, Mr. Trump continued to deny the election results.

“The Fraudulent Presidential Election of 2020 will be, from this day forth, known as THE BIG LIE!,” he said in an emailed statement.

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 in an interview that aired on Monday.

The admission comes at a time of new challenges for Berkshire. At the company’s annual meeting on Saturday, investors questioned lucrative business opportunities Berkshire missed during the pandemic and the company’s reluctance to share information about efforts to combat climate change and increase diversity in its work force.

Mr. Buffett has said for several years that he and his board had been thinking about who would take over when he steps down. Last year, for instance, he wrote in his annual letter to investors, “Berkshire shareholders need not worry: Your company is 100 percent prepared” for his departure.

But that opacity has left corporate-governance experts, and increasingly shareholders, dissatisfied: BlackRock, which owns a 5 percent stake in Berkshire, disclosed this weekend that it had voted against the re-election of the head of Berkshire’s board governance committee in part over “limited disclosure on succession planning.”

BlackRock declined to comment Monday on Mr. Buffett’s disclosure.

For many, the naming of Mr. Abel as Berkshire’s heir apparent confirmed what they had already 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.

“We do have a great deal of comfort in Abel,” said James Shanahan, an analyst at Edward Jones. “He’s proved to be a really effective leader of Berkshire Hathaway Energy.”

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 restaurant in Birmingham, Mich., last month. Publicly traded companies and businesses with more than 20 locations are not eligible for grants.Credit…Emily Elconin for The New York Times

After being devastated by the pandemic, restaurants, bars, caterers and other food businesses can now apply for a new $28.6 billion federal grant fund that will begin taking applications at noon today.

Eager applicants are ready to pounce. The Independent Restaurant Coalition, a group that lobbied for the relief fund, is encouraging business owners to apply the moment the application system opens.

“We know these funds are in high demand and will likely be distributed quickly,” said Erika Polmar, the coalition’s executive director.

The Restaurant Revitalization Fund, managed by the Small Business Administration, offers grants of up to $10 million. The amount each business can receive represents the difference between its 2019 and 2020 gross receipts, minus certain other federal assistance such as loans from the Paycheck Protection Program.

Publicly traded companies and businesses with more than 20 locations are ineligible for the fund.

All qualifying businesses will be able to apply beginning Monday, but for the first 21 days, the Small Business Administration will approve claims exclusively from businesses that are majority-owned by people who fall into one of the priority groups designated by Congress when it created the fund: women, veterans, and individuals who qualify as both socially and economically disadvantaged.

The agency said that latter group includes those who meet certain income and asset limits and are Black, Hispanic, Native American, Asian-Pacific American or South Asian American.

Applicants from those groups will be asked to certify their own eligibility for the exclusivity period. That three-week priority period alone is likely to exhaust the fund.

The money allocated by Congress “is probably not going to be enough funds, in all likelihood, for the demand that’s out there,” Patrick Kelley, who runs the S.B.A.’s Capital Access office, said on a webinar last week. He said he hoped Congress would provide more money as needed.

Applicants can register on the agency’s website or directly through some sales technology vendors, including Toast and Square. The S.B.A. said its goal was to respond to applications within 14 days.

This is the second grant program the agency has launched recently. Last week, it began taking applications for the Shuttered Venue Operators Grant, a $16 billion relief fund for theaters, music clubs and other live event businesses. Nearly 9,500 businesses applied for that relief on the program’s first day but the agency has not yet issued any grant decisions.

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.

By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet

  • The S&P 500 climbed about half a percent in early trading on Monday, while the Stoxx Europe 600 index was 0.2 percent higher. In Asia, indexes ended the day lower.

  • The S&P 500 had closed out April with a 5.2 percent gain, the largest monthly gain since November.

  • Oil prices slipped, 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, speaking at the Berkshire Hathaway annual shareholders meeting on Saturday, said the
    cost of construction materials was rising.

  • 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.

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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