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Verizon Sells AOL and Yahoo to Apollo for $5 Billion

Yahoo and AOL, kings of the early internet, saw their fortunes decline as Silicon Valley raced ahead to create new digital platforms. Google replaced Yahoo. AOL was supplanted by cable giants.

Now they will become the property of private equity. Verizon, their current owner, agreed to sell them to Apollo Global Management in a deal worth $5 billion, the companies announced Monday.

The business housing the two brands, Verizon Media, is to be renamed (yet again) to Yahoo (sans the brand’s stylized exclamation point), and the sale will also include its advertising technology business. Verizon will retain a 10 percent stake in the newly formed media group, the company said in a statement.

Guru Gowrappan, the head of Verizon’s media business, who will continue to lead the new Yahoo, was optimistic in a note to employees Monday morning. “This next evolution of Yahoo will be the most thrilling yet,” he said in the memo, which was obtained by The New York Times.

championed the deal as part of its “strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium experience.”

Tim Armstrong, the head of AOL, was part of the package, and he soon persuaded Verizon’s executives to add to its media holdings. Mr. Armstrong orchestrated the 2017 purchase of Yahoo for $4.5 billion — a prize he had been pursuing for years.

In the statement announcing the deal at the time, Mr. Armstrong said, “We’re building the future of brands.”

It was all in the pursuit of almighty “scale,” a business term of art that has almost become a religious mantra in Silicon Valley. The goal was to build a bigger audience to sell more advertising. But the internet’s economics had already shifted years before, and content that users provided free, whether in the form of Facebook posts or YouTube videos, drove much online activity. AOL and Yahoo, despite their big audiences, had become distant also-rans.

Verizon still saw value in Yahoo and AOL. The idea was to give Verizon customers content they couldn’t get elsewhere at a time when all cellphone service offerings were essentially the same. And AOL’s giant ad-tech business could give Verizon a better way to sell advertising on its phones.

departure of Mr. Armstrong and began a restructuring of the media unit. In early 2019, it laid off about 800 workers, about 7 percent of the staff. Last year, Verizon began to dismantle the media group with the sale of HuffPost to BuzzFeed.

Mr. Vestberg called the Apollo transaction “a bittersweet moment” in a companywide memo Monday morning, but he added that the sale “is a big step forward” for the media group.

“I believe this move is right for all of our stakeholders, including the Media employees,” he said. “Our purpose is to create the networks that move the world forward, and this will help us better focus all our energy and resources on our core competencies.”

Verizon has had to spend big to improve its mobile business. In March, it agreed to pay nearly $53 billion to license wireless airwaves that will help the company expand its 5G infrastructure. It also plans to spend $10 billion over the next few years to wire more cell towers and upgrade its systems. The company’s total debt now exceeds $180 billion, and its net debt is more than three times its annual pretax profits. Typically, the industry prefers to keep that ratio closer to 2.5.

For Apollo, the purchase is an opportunity to further invest in the digital media space — an industry it has already put money into, with deals for the photo printing business Shutterfly, the web-hosting company Rackspace and Cox Media Group, which owns TV and radio stations throughout the country. Apollo also has plenty of experience with the complex process of buying businesses spun out from larger companies, which generally requires separation of interwoven financials, systems and, often, key executives.

And Yahoo and AOL still generate plenty of revenue. Verizon’s media division recorded $1.9 billion in sales in the first three months of 2021, a 10 percent gain over the prior year.

regulatory scrutiny of some of the biggest players, like Google. And as digital ads rebound postpandemic, 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 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.”

Apollo has been on a buying spree in the past few months, announcing deals to acquire Michaels, the chain of crafting stores, and the Venetian Resort in Las Vegas. It has also had a shake-up in its senior ranks, with its co-founder Leon Black stepping down as chairman in March after the revelation he had paid more than $150 million to the convicted sex offender Jeffrey Epstein.

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Insider Journalists Form a Union

Journalists at Insider, the news site formerly called Business Insider, said on Monday that they had formed a union, joining a wave that has swept digital media companies.

A majority of more than 300 editorial workers, a group that includes reporters, editors and video journalists, voted in support, union representatives said.

Insider, which changed its name this year, was co-founded by Henry Blodget in 2007 as a business-focused publication with an emphasis on the tech industry. In recent years, it has expanded its areas of coverage.

Axel Springer, a digital publishing company based in Berlin, paid $343 million for a 97 percent stake in the company in 2015 and bought the remaining 3 percent in 2018. Mr. Blodget stayed on as chief executive. Insider, which has grown during the pandemic, bumped up the minimum annual salary for staff members to $60,000 in February.

formed a union.

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India’s New Media Rules Could Silence Online News Outlets

NEW DELHI — Narendra Modi, India’s prime minister, has cultivated and cowed large parts of the country’s normally raucous news media in recent years as part of a broader campaign against dissent.

One group remains untamed: A relatively new generation of scrappy, online-focused news outlets. With names like The Wire, The Print, The Scroll, and NewsLaundry, these publications lack big corporate owners that Mr. Modi’s party can court. They also don’t depend on government advertising money that officials can threaten to withhold.

Now, the platforms say, Mr. Modi is working to rein them in, too.

India’s media outlets had until Saturday to comply with new government rules that they say will force them to change or take down content if online trolls mount a concerted campaign of complaints against their coverage. It would also give the government sweeping new powers to quickly take down articles or other material.

The rules, they say, will force them to toe Mr. Modi’s line or close their doors as the prime minister pushes his most ambitious and controversial initiatives.

freedom of the press has eroded under Mr. Modi’s watch.

Still, while his efforts enjoy broad support in India, critics of his campaigns — from remaking the country’s money system overnight to changing citizenship laws to disadvantage Muslims — have found a home in the robust online space. Their potential audience is vast: India could have more than 800 million smartphone users by next year.

responded by threatening the critics and international platforms like Twitter.

In February, it also enacted online content rules that empower complainers. Online platforms must name a grievance officer who acknowledges complaints within one day and resolves them within 15. The complaint must be taken swiftly to a three-layer system, with a final stop at a government-appointed body that can order platforms to delete or change content.

The new rules also give the government emergency powers to take down content immediately if officials believe it threatens public order or the country’s security or sovereignty.

Netflix and Amazon. The full scope of the law is unclear; some people believe that it could apply to international news publishers like The New York Times.

The government has said it wants to protect average users from online abuse. Officials have cited the spread of deliberate disinformation, harassment of women, abusive language and disrespect of religious groups. Mr. Modi’s ministers have said the rules create a “soft-touch oversight mechanism” that would protect India and prevent “internet imperialism” by major social media platforms.

ownership structure behind many Indian media outlets makes them too dependent on advertising and investors, he argues, influencing their editorial decisions. With The Wire — owned by the Foundation for Independent Journalism, a trust — he wanted to explore a different arrangement.

The Wire operates from a crammed southern New Delhi office. Mr. Varadarajan sits in a corner. To save money after India’s stringent Covid-19 lockdown last year, The Wire vacated a floor.

“We have all been downgraded,” he told a columnist one recent afternoon who had looked for him at his old office upstairs. “Cutbacks.”

sudden increase in the fortunes of the son of one Mr. Modi’s most important lieutenants. They have also scrutinized business deals that may have favored companies seen as friendly to the prime minister.

At a recent meeting at The Wire newsroom, the conversation ranged from coverage plans for state elections, to how to shoot video quickly, to how to balance working at home and in the office as coronavirus cases tick up.

But much of the talk focused on the new regulations. Mr. Varadarajan told his staff that The Wire’s first court hearing had gone well but that the authorities were watching the digital platforms closely.

“Now that you know they will be waiting for opportunity to latch onto anything, look at it as extra responsibility,” Mr. Varadarajan said. “We have to be 150 percent careful to not leave any wiggle room to troublemakers, to not make their life any easier.”

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Unmasked: man behind cult set to replace QAnon

The mysterious individual behind a new and rapidly growing online disinformation network targeting followers of QAnon, the far-right cult, can be revealed as a Berlin-based artist with a history of social media manipulation, a prominent anti-racism group claims.

Since Donald Trump left the White House, QAnon’s vast online community has been in a state of flux as it comes to terms with the reality that its conspiracy theories – such as the former US president being destined to defeat a cabal of Satan-worshipping paedophiles – amount to nothing.

That may explain why significant numbers have turned to a new far-right network, found mostly on the Telegram messaging app, that is growing quickly in the UK and globally and has amassed more than one million subscribers so far this year.

Sebastian Bieniek in a blue shirt and jeans, sitting on a director's chair
Sebastian Bieniek in 2018. The campaign group Hope Not Hate says he has a track record of inventing online conspiracies. Photograph: Reza Mahmoudidschad

Called the Sabmyk Network, like QAnon it is a convoluted conspiracy theory that features fantastical elements and is headed by a mysterious messianic figure. Since its emergence there has been widespread speculation about who that figure might be. The person who first posted as “Q” has never been positively identified.

This week the British anti-fascist group Hope Not Hate will unmask Sabmyk’s leader, who it claims is 45-year-old German art dealer Sebastian Bieniek. It says Bieniek – who has not responded to questions from the Observer – has a history of creating online conspiracies and even wrote a book in 2011 called RealFake that detailed a campaign to deceptively promote his work.

But Hope Not Hate says the speed of Sabmyk’s growth serves as a warning of the opportunities for manipulation that exist on social media, particularly unregulated alt-tech platforms such as Telegram.

Gregory Davis of Hope Not Hate, which will publish its annual report into the far right on Monday, said: “His success in developing such a huge audience is a reminder that the QAnon template of anonymous online manipulation will continue to pose a threat in the years to come.”

Since 21 December last year, when Sabmyk was supposedly “awakened”, more than 136 channels in English, German, Japanese, Korean and Italian have sprung up, adding tens of thousands of followers on a daily basis.

Much of Sabmyk’s content is designed to appeal to QAnon followers; it features Covid mask scepticism, anti-vaccine conspiracies and false assertions that the 2020 US election was stolen from Trump.

Some is also designed to actively recruit Britons: one Sabmyk channel, the British Patriotic Party, uses the same branding as anti-Muslim group Britain First and posts about the mayor of London, Sadiq Khan.

Other channels are entitled London Post and Liverpool Times, as well as the Great Awakening UK, a reference to a well-known QAnon trope predicting a day of reckoning in which Trump would rise against his liberal enemies. Others include WWG1WGA, an acronym for the QAnon rallying call “where we go one, we go all.”

Among the clues used to identify Bieniek are posts saying that the messiah Sabmyk can be identified by specific marks on his body. One post claimed that Sabmyk would have “17 V-shaped scars” on his arm, the result of a “prophetic ceremony at the age of 24”.

What is QAnon and why is it so dangerous? – video explainer
What is QAnon and why is it so dangerous? – video explainer

Hope Not Hate has found a since-deleted section on Bieniek’s website recalling a 1999 art exhibit in which, aged 24, he cut V-shaped wounds into his arm for 16 days in a row.

Attempts to connect Sabmyk to Trump have been made, including a clip that splices together instances of the former president saying “17”, and a doctored image showing him with a Sabmyk pamphlet in his suit pocket.

Bieniek has created countless false identities, according to the Hope Not Hate investigation, to promote his career as an artist. The group also says his German Wikipedia page has been deleted at least four times, most recently in January.

A list of Bieniek’s accounts has been sent to platforms including Telegram with a call for them to be removed on the basis of “inauthentic and coordinated platform manipulation”. Telegram has been approached for comment.

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For Creators, Everything is for Sale

A rash of new start-ups are making it easier for digital creators to monetize every aspect of their life — down to what they eat, who they hang out with and who they respond to on TikTok.

Tens of millions of people around the globe consider themselves creators, and the creator economy represents the “fastest-growing type of small business,” according to a 2020 report by the venture capital firm SignalFire.

But as the market gets more and more competitive — and the platforms and their algorithms remain unreliable — creators are devising new, hyper-specific revenue streams.

One comes in the form of NewNew, a start-up in Los Angeles, that describes its product as creating a “human stock market.” On the app, fans pay to vote in polls to control some of a creator’s day-to-day decisions.

if you aren’t getting paid?)

Recently, a platform called PearPop has become popular for allowing fans to pay for interactions with their idols on social media. For $250, for instance, the TikTok star Griffin Johnson will comment on your video. If you don’t have $250 to spare, you can offer your best bid.

“Monetizing your social presence has traditionally only been accessible to those with a large following that can secure big brand deals,” said Cole Mason, the co-founder and chief executive of PearPop. “This is no longer the case. The idea for PearPop democratizes creator monetization by providing something that makes a lot of sense for creators with 10,000 followers and 10 million followers alike.”

Stir, is seeking to help creators split money for videos they make together.

“We think the future of creator monetization is collaboration,” said Joseph Albanese, the C.E.O. and a founder of Stir. “We let creators take any place they make money, whether it’s a YouTube video or Shopify store, and split the revenue with other creators.”

The crypto world has also proved enticing for creators looking to monetize interactions.

Rally.io, a crypto platform, allows creators to start their own digital currency in order to build independent economies with their fans. Fans can purchase the creator’s currency and use it to unlock exclusive or unreleased content.

The Clubhouse star Bomani X has begun offering his own $BOO Coin currency and the Twitch creator FanHOTS has introduced $FAN Coin; fans who hold the coin can use it to choose which character he will play in online games.

NFTs), which are pieces of digital art and media that live online. Though anyone can see an NFT on the internet — buyers do not get to “own” anything in a physical sense — they have become a fast-growing market. The pieces of digital media function as rare collectibles. The YouTube star Logan Paul recently sold $5 million worth of NFTs.

Elijah Daniel, 26, a creator in Los Angeles, is helping followers put a price on the creators. On Friday, he launched the Clout Market, which is a little bit like trading cards, but of influencers.

The Clout Market offers 10 million NFTs representing top creators including Trisha Paytas, James Charles, Bryce Hall, David Dobrik and Jeffree Star. The NFTs are designed to look like Pokemon cards with pixelated images of each creator. The cards carry parody names for legal purposes, Mr. Daniel said, so Tana Mongeau’s card reads “Tana Mongoose.”

The price for these items is determined by the creator’s relevance online. Mr. Daniel worked with a developer to create a dynamic pricing structure that adjusts prices in real time. (It pulls from social and analytics platforms data.) If a creator loses or gains followers or trends on Twitter, the price of the NFT Mr. Daniel created for them will go up or down.

Mr. Daniel said the goal of selling these NFTs is to let fans monetize the drama surrounding their favorite influencers. “A lot of fans will buy these for support,” he said, “haters will buy them to bet on people’s downfall.”

“Influencers and social media stars are making so much money off drama and scandals,” he said, “and most of them are fake. This is a way for the fans who follow along so heavily with everything to be able to invest in those scandals and make money too.”

He added: “If we have to go through another scandal, we all better be getting paid for it.”

“This is the first-wave of creators adopting new technologies to connect with an already engaged fan-base,” said Jeremiah Owyang, a creator adviser to Rally.io. “But instead of it being one-way and solely transactional,” he said, “the fans are as much part of the creation experience as the creator.”

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