Yahoo Finds AOL Buyer as Dial-Up Internet Dies Off

AOL’s owner has reportedly found a buyer for the one-time internet service titan.

Yahoo, backed by private equity firm Apollo Global Management, is in advanced discussions to sell AOL to Italian technology company Bending Spoons for roughly $1.4 billion, Reuters reported Thursday (Oct. 2), citing four sources familiar with the matter.

That figure is far lower than the $5 billion Apollo paid to acquire AOL from Verizon in 2021. Verizon had paid $4.4 billion for the company six years earlier.

The Reuters report follows a Wall Street Journal story from last month that Apollo was seeking a buyer for AOL, which was a major figure of the early internet era. Known for its email service and CDs providing free web access, AOL was part of what was at the time the largest merger in history when it merged with Time Warner in 2000.

The Reuters report notes that Bending Spoons has become one of Europe’s most prominent technology firms, focused on purchasing and revamping struggling tech companies. The company was valued at $2.55 billion last year, making it a rare “unicorn” — a private company valued at $1 billion or more — among Italian tech companies, the report added.

The deal, the report added, would combine AOL’s expansive user base with Bending Spoons’ portfolio of mobile applications. AOL derives revenue from advertising and through its subscription services, including LifeLock identity theft protection, LastPass password management, and McAfee’s Multi Access anti-malware tool.

A source familiar with the company’s performance told Reuters that AOL website traffic has grown 20% year-over-year among the users aged 25 and 54, outpacing the growth among users who were over 55.

The proposed deal is happening at a time when dial-up internet — at one time AOL’s bleeping and buzzing hallmark — appears to be coming to an end.

According to report by the Associated Press (AP), AOL had confirmed it would be ending dial-up service at the end of September, noting in an update on its support site last month that it “routinely evaluates” its offerings and had decided to discontinue dial-up, along with associated software “optimized for older operating systems,” from its plans.

The AP report said that as of Wednesday (Oct. 1), dial-up was no longer being advertised on AOL’s website, and that company help pages like “connect to the internet with AOL Dialer” appeared to be unavailable.

The report also cites Census Bureau data showing that a handful of American consumers – 163,401 households, or 0.13% of internet-connected homes – were relying on telephone lines to access the web as of 2023.