Verizon Eyes Abandoning Yahoo Acquisition Or Slashing $4.83 Billion Price Tag

Verizon
Let’s put it bluntly; it sucks to be Verizon right now. Back in July, the company announced its intentions to purchase Yahoo for $4.83 billion in an effort to “enhance [its] strategy of providing a cross-screen connection for consumers, creators and advertisers.” That paltry price tag was a relative bargain compared to the $50+ billion that Microsoft was rumored to offer for Yahoo earlier in the decade.

However, not long after Verizon made its intentions known, it was rocked by the news that Yahoo executives sat on information that 500 million accounts had been hacked in 2014. Following these disclosures to the public, it was reported that Verizon was seeking to trim $1 billion off the purchase price to adjust for the harm that had been done to the Yahoo brand.

Yahoo

It was revealed yesterday that a separate breach in 2013 affected over 1 billion accounts, potentially exposing customer names, email addresses, telephone numbers, dates of birth, hashed passwords, and encrypted/unencrypted security questions and answers. Needless to say, Verizon is now looking for a quick way to either back completely out of the deal or drastically pare own its purchase price.

The ball started rolling yesterday afternoon, when Verizon issued the following statement:

As we’ve said all along, we will evaluate the situation as Yahoo continues its investigation. We will review the impact of this new development before reaching any final conclusions.

Today, however, Verizon’s powerful legal team has assembled to determine whether it can scuttle the deal altogether. One of the biggest sticking points is that Verizon doesn’t want to face any potential legal fallout from Yahoo’s utter lack of regard for customer security -- it wants to ensure that Yahoo assumes all potential legal responsibility for it actions. This latest hacking disclosure is even more troubling for Yahoo, as more than 150,000 U.S. government employees are affected by the data breach.

It’s uncertain how Verizon will proceed at this point. Cutting deeply into the $4.83 billion price (far greater than the $1 billion discount that was tossed around a few months ago) seems more likely, while completely blowing up the deal might be more trouble than it’s worth. Yahoo might be damaged goods, but its user base and advertising infrastructure is still highly valuable to Verizon.


Via:  Bloomberg
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