Verizon Shaves Off $350m From Yahoo Purchase After Massive Data Breaches
The telecoms giant will share the cost of lawsuits levied at Yahoo following the cyber attacks it suffered
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.
Deal or no Deal
After the pair of data leaks Yahoo suffered several years ago, which were reported in 2016, with one of them being the biggest data breach of all time, doubts were cast over whether Verizon would complete its purchase of Yahoo.
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.
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