Verizon is getting a sizable discount on its purchase of Yahoo. The communications company has reached a tentative agreement that reduces the price of its bid on Yahoo’s assets by $250 million, according to a report from Bloomberg.
When Verizon originally came to an agreement to buy Yahoo in June 2016, the company agreed to pay $4.83 billion. Now it will knock a quarter of a billion off that price in a renegotiated deal made between the companies.
Verizon will acquire digital advertising, email and media assets from Yahoo, a beleaguered internet company that has faced setback after setback that has led to it lagging behind its competition for the better half of the last decade.
“The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising,” Verizon chairman and CEO Lowell McAdam said of the agreement in July 2016.
Rumors of Verizon attempting to renegotiate the purchase price for Yahoo began in October 2016 after Yahoo announced it was hit by a massive data breach that compromised the credentials of more than 500 million of its users.
According to Yahoo, the hack came from state-sponsored attackers and took place in 2014—meaning a half a billion users were potentially at risk for two years before ever learning of the breach. Yahoo assured users the stolen data did not include unprotected passwords, payment card data or bank account information.
It was reported that Verizon would seek a $1 billion discount because of the data leaks. Verizon’s chief financial officer Fran Shammo said on a call with industry analysts in October 2016 that the companies had discussed the breach and he believed it would have a “material impact” on Yahoo.
“Let me just reiterate what they have said — we are still evaluating what it means for the transaction,” Shammo said on the call.
Verizon had also reported declining revenue and plunging subscriber growth during its quarter three earnings report in October 2016 which may have impacted its interest in reworking the Yahoo deal.
It is unclear if the agreed upon reduction in price of $250 million is in any way related to the data breach.
Yahoo reported last month that it beat Wall Street expectations by posting $1.47 billion in revenue during the fourth quarter of 2016. At the time, Yahoo said it would close its deal with Verizon in the second quarter of 2017.
Source: SANS ISC SecNewsFeed @ February 16, 2017 at 09:12PM