Verizon seeks $1bn discount after Yahoo! breach
Verizon wants a whopping $1bn discount from the original price of $4.8bn it agreed for Yahoo or it may even pull out of the deal altogether
Verizon wants a whopping $1bn discount from the original price of $4.8 bn it agreed to buy Yahoo for according to several sources told The New York Post. Otherwise, it may pull out of the deal altogether.
Yahoo was forced to reveal two weeks ago that it had been hacked in 2014 and that users names and passwords for over 500 million accounts had been stolen.
As if that was not enough to give Marrissa Mayer a bad day at the office it turned out that Yahoo had complied to a secret Foreign Intelligence Surveillance Court to scan emails for ‘terrorist’ signatures.
The Post claimed: “In the last day we have heard that Tim [Armstong] is getting cold feet. He is pretty upset about the lack of disclosure, and he is saying can we get out of this or can we reduce the price?” said a source.
That might just be tough talk to get Yahoo to roll back the price. Verizon had been planning to couple Yahoo with its AOL subsidiary in an attempt to compete with Google and Facebook on advertising spend.
The discount is being pushed because there is little doubt that Yahoo’s value has been damaged by the combination ineptitude and compliance confounded with a reckless lack of disclosure.
AOL/Yahoo could reach about 1bn consumers if the deal closes in the first quarter of next year, in an attempt to reach 2bn by 2020. AOL boss Tim Armstrong has allegedly met with Yahoo executives to press home his case for a price reduction while Mayer is trying to protect shareholders,” said a source close to talks. However, Yahoo is resisting any attempts to negotiate the price down.
Yahoo is believed to be only US internet firm so far to comply with scanning all emails.
The situation is bad news for AOL, which has not yet completed integrating with Verizon, which acquired it 16 months ago for $4.4 billion.
Verizon may also be concerned about the possibility that they will have to set aside a large contingency fund in case of liabilities associated with the Yahoo email hack.