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Yahoo Nears $1.4 Billion Deal to Sell AOL to Italy’s Bending Spoons

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Yahoo is close to finalizing a deal to sell its AOL unit to Italian technology company Bending Spoons for about $1.4 billion, according to four sources familiar with the matter. The sale would mark the latest chapter in the decline — and reinvention — of one of the internet’s earliest giants.

The Milan-based app developer is in advanced negotiations to purchase AOL, the sources said, but cautioned that no final agreement has been signed, and the talks could still collapse.

Yahoo, owned by Apollo Global Management, did not respond to Reuters’ request for comment, while both Bending Spoons and Apollo declined to discuss the ongoing talks. Apollo acquired a 90% stake in Yahoo from Verizon in 2021 in a $5 billion deal.

FROM INTERNET ICON TO REVAMP OPPORTUNITY

Once the dominant force of the early internet, AOL was synonymous with the “You’ve Got Mail” era and played a defining role in the online revolution of the late 1990s. Its 2000 merger with Time Warner, then the largest corporate deal in history, ended in massive losses and regulatory scrutiny — symbolizing the collapse of the first dot-com boom.

A successful sale to Bending Spoons would be a fresh start for the AOL brand, adding its advertising and subscription-based services — including LifeLock, LastPass, and McAfee Multi Access — to the Italian company’s fast-expanding portfolio.

A source familiar with AOL’s recent performance said the company has seen 20% year-over-year website traffic growth, driven primarily by users aged 25 to 54, a shift from its traditionally older demographic. The rise is attributed to new content verticals such as Health, Science & Tech, Home & Garden, and True Crime.

BENDING SPOONS: EUROPE’S RISING TECH STAR

Founded in 2013 by Luca Ferrari, Bending Spoons has become one of Europe’s most prominent tech firms, known for acquiring struggling digital platforms and modernizing them. Its apps now attract 300 million monthly users worldwide.

The company was valued at $2.55 billion after a February 2024 funding round, earning it “unicorn” status — a rarity in Italy’s tech ecosystem.

Bending Spoons has recently been on an acquisition spree, purchasing WeTransfer earlier this year and agreeing to take Vimeo private for $1.38 billion in what is currently its largest deal.

Adding AOL’s global reach would further bolster the company’s ambitions and position it as a potential IPO candidate in the United States. CEO Luca Ferrari previously told Reuters that while no immediate plans exist for a public listing, the firm is “working to be ready” and looking to expand beyond Europe.

If completed, the $1.4 billion AOL acquisition would cement Bending Spoons’ role as a new European powerhouse reviving legacy internet brands for the AI and mobile era.

Adobe’s AI Monetization Struggles Lead to Dull Forecast, Shares Drop

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Adobe (ADBE.O) has projected its second-quarter revenue to fall within Wall Street’s expectations, but it is facing challenges in the monetization of its artificial intelligence (AI) products, leading to concerns over its ability to capitalize on the growing demand for AI in creative tools. As a result, shares of the company dropped more than 4% in extended trading.

The company expects second-quarter revenue between $5.77 billion and $5.82 billion, in line with analysts’ estimates, according to data compiled by LSEG. Adobe reaffirmed its annual revenue forecast, and CEO Shantanu Narayen expressed confidence in the company’s ability to capitalize on the acceleration of the creative economy powered by AI.

Despite this optimism, analysts and investors are questioning the pace of monetization for Adobe’s generative AI products. As the company pours resources into differentiating itself from competitors, it aims to enhance its vast portfolio with more AI-driven editing tools. However, there is growing skepticism about whether Adobe can quickly turn its AI offerings into substantial revenue streams.

“I think guidance is rough, and I think people are questioning, is the AI monetization quick enough?” said Parker Snook, a senior research analyst at M Science.

In an effort to stay ahead of rivals, Adobe has been aggressively integrating AI into its software products, notably Photoshop, which is widely used by professionals in a variety of industries. However, its AI and add-on offerings generated $125 million in annual recurring revenue (ARR) at the end of the quarter, and the company expects to double that figure by the end of fiscal 2025, according to CFO Dan Durn.

Despite concerns over AI monetization, DA Davidson analyst Gil Luria is optimistic that new products will eventually ease investor worries: “As Adobe continues to deliver new products, we expect those concerns to be replaced by excitement over those products.”

For the first quarter, Adobe reported revenue of $5.71 billion, surpassing analysts’ estimates of $5.66 billion. The company also saw digital media revenue of $4.23 billion, which exceeded analyst expectations of $4.19 billion. On an adjusted basis, Adobe earned $5.08 per share, above the forecast of $4.97 per share.