Verizon to bail on Yahoo purchase as hacks and NSA front-work cause entire market to hate the yahoo brand.
2 weeks ago The Investigators 0
Verizon executives are facing a hefty dose of buyer’s remorse. Shortly after the service provider announced plans to acquire Yahoo’s core business, a data breach was made public — and it is thought to be one of the largest in history, affecting at least 500 million accounts.
The hack occurred in 2014, but Yahoo discovered it in August. Now, Verizon’s general counsel, Craig Silliman, says the provider has “reasonable basis” that the data breach could qualify as a reason to pull out from its $4.83 billion deal to buy Yahoo, according to Reuters.
“I think we have a reasonable basis to believe right now that the impact is material, and we’re looking to Yahoo to demonstrate to us the full impact,” he said. “If they believe that it’s not, then they’ll need to show us that.”
Verizon is waiting for Yahoo to finish its investigation into the breach. Yahoo says the personal information of more than 500 million accounts was compromised, but the company claims bank account numbers and credit card data were not targeted, and there is no evidence hackers still have access to its network.
“We are confident in Yahoo’s value and we continue to work towards integration with Verizon,” a Yahoo spokesperson told Digital Trends.
The comments from Verizon’s general counsel are likely an attempt to renegotiate the deal to a lower price. The company beat out AT&T and Dan Gilbert, the CEO of Quicken Loans, in the bidding process, and Big Red hopes the acquisition will help it compete with the likes of Google and Facebook.
What is so attractive about Yahoo’s core business? It is valued at an estimated $5 billion to $8 billion, and it includes internet services such as its search engine, Yahoo Mail, and online publications like Yahoo Tech and Yahoo Finance. One of Yahoo’s most profitable services is its advertising division, which is projected to generate $2.83 billion this year, commanding around a 1.5 percent share of the online ad market.