Verizon is close to renegotiating its deal to acquire Yahoo’s internet assets in light of recent hacks and related controversies, Bloomberg said.
Yahoo headquarters in Sunnyvale, California.
Looks like Yahoo’s hacking controversies will come at a cost.
Verizon, which was initially set to acquire the troubled internet pioneer for $4.8 billion, is shaving about $250 million off that price, according to Bloomberg.
The reason for the discount? Verizon has reportedly been trying to renegotiate the deal ever since Yahoo and CEO Marissa Mayer revealed the company was hit by two big cyberattacks, in which users had their passwords and personal information swiped.
One of them, disclosed in September, occurred in 2014 and affected 500 million user accounts. When it was announced, it was thought to be the biggest cyberattack of all time. Three months later, Yahoo outdid itself and disclosed a hack that affected twice that number — a billion accounts. It occurred in 2013.
Verizon declined to comment. Yahoo did not respond to a request for comment.
The price reduction is just the latest setback on Yahoo’s long, winding road from independent to acquired company. On top of the hacks, Yahoo is also reportedly being investigated by the Securities and Exchange Commission over allegations it was slow to tell its investors about the hacks. Yahoo also came under fire last October for reportedly building tools to help the federal government surveil customer emails.
Still, Yahoo’s fumbles don’t seem to be deal breakers for Verizon. The telecom company actually isn’t buying all of Yahoo, just its internet assets, which includes brands like Yahoo Mail and fantasy sports, as well as its advertising tech. The idea behind the buyout is to combine Yahoo with AOL, which Verizon bought in 2015, and create a solid No. 3 option behind Google’s and Facebook’s digital advertising powerhouses.
When Mayer joined the company in 2012, she was seen as a potential savior for the beleaguered company. A former Google executive, she helped bring the company into the mobile era by refreshing all of Yahoo’s services for phones and tablets. But Mayer, 41, never figured out how to make much money off the company’s properties.
Last month, Yahoo said the deal, which was initially set to close in the first quarter, would likely be delayed to the second quarter. The deal with the new price tag could close in April, according to The Wall Street Journal. But the SEC investigation could slow that timeline, the report said.
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