Yahoo says it is will to cut back $350 million of the price that Verizon will be to obtain the internet business. This decision seems to be following the unknown costs caused by the hack that Yahoo suffered some time ago.
Both Verizon and Yahoo have agreed to share the liabilities that come with the hacks. The hacks occurred sometime during 2013 and 2014. During this time, over 1 billion of Yahoo’s users were exposed to hacker who gained the email, names, birthdays, and security questions of over 1 billion of the internet company’s users. It was the largest security breach that any company has ever experienced. That hack was soon followed by the breach of nearly 500 Yahoo users’ accounts. As Yahoo wraps up its investigation of the incidents, it says it plans on releasing more information.
It was this major breach of Yahoo security that put the deal to sell its internet business to Verizon. The deal, which was made last summer, is now at an estimated value of $4.48 billion. It would seem that where shareholders were once hesitant, they are now ready to vote on the deal as soon as April.
Despite the breach of its security, Yahoo stressed that these hacks have very little effect on how its services are run. Yet when the numbers are run, it’s shown that there has not only been a drop in emails sent but a decrease in page views altogether.
Verizon had also obtained AOL back in 2015 for $4.4 billion. Verizon had initially said that it would combine Yahoo with its AOL internet business, however it would seem that is no longer the case. Now, Verizon will keep the two companies separate from each other. Even though Verizon plans to keep the brands separate, it will use the combined sales and digital advertising from both to bring in the audience of almost one billion internet users.
Yet Yahoo and AOL are not as large as internet giants like Facebook and Google. While Yahoo is still known to drag in an abundant audience, investors hold Google and Facebook as alternatives since either currently rule the digital advertising world.
When it comes to term of selling its internet business to Verizon, there is no clear answer as to whether Marissa Mayer, the former Google executive who became Yahoo chief back in 2012, will stay on with the company once things are settled with Verizon. Mayer didn’t do so well when it came to turning around Yahoo’s internet business which seemed to struggle for quite some time. That led to her having to write off a majority of the value that came with her acquisition of Tumblr.
Verizon’s executive vice president, Marni Walden, commented on the company’s acquisition of Yahoo saying, “We have always believed this acquisition makes strategic sense.” Walden also went on to say that Verizon is enthusiastic about the deals completion, and that Verizon can’t wait to “welcome Yahoo’s tremendous talent and assets into our expanding portfolio.”