Verizon has cut $350 million (£280m) off the price it is willing to pay for Yahoo, following the massive data breaches that came to light last year.
Yahoo has agreed to the price cut and will be sold to Verizon for $4.46 billion (£3.59bn), with both companies splitting the costs of the lawsuit that have been levied at Yahoo after the data breaches were reported.
“The amended terms of the agreement provide a fair and favourable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter,” said Marni Walden, executive vice president at Verizon.
Clearly Verizon is still keen on snapping up Yahoo but needed the deal to be somewhat sweetened after the data breaches exposed Yahoo to lawsuits and left it with a reputation for not being a company users could trust with casual abandon.
Once the deal is completed and Yahoo enters Verizon’s fold, Yahoo’s advertising technology tools as well as email, messenger and search assets will be integrated into Verizon’s AOL business unit.
Verizon’s plans for its acquisition are no doubt moves to spin money out of online services rather than relying on revenue from the US telecoms market, where it faces stiff competition from rival AT&T.
Buying Yahoo does saddle Verizon with an equal share of the former’s lawsuits from both data protection regulators and disgruntled customers; with the latter it is currently difficult to say how many of Yahoo’s customers will file lawsuits against the company, which in turn means the costs Verizon could end up sharing may be significant.
As such, it would appear that Verizon sees more long -term potential in buying and integrating Yahoo with AOL, as well as gaining access to Yahoo’s billion-strong user base, which mitigates the potential for high costs in the short-term.
How well do you know network security? Try our quiz and find out!
Digital transformation is an ongoing journey, requiring continuous adaptation, strong leadership, and skilled talent to…
Australian computer scientist faces contempt-of-court claim after suing Jack Dorsey's Block and Bitcoin Core developers…
OpenAI's ChatGPT gets search features, putting it in direct competition with Microsoft and Google, amidst…
New Google Maps allows users to ask for detailed information on local spots, adds AI-summarised…
US-sanctioned Huawei sees sales surge in first three quarters of 2024 on domestic smartphone popularity,…
Apple posts slight decline in China sales for fourth quarter, as Tim Cook negotiates to…