Brief

Verizon, Yahoo could discount deal by $300M

Dive Brief:

  • Yahoo is reportedly offering Verizon a $250-$350 million discount off its purchase price following the disclosure of two massive data breaches last year, according to Bloomberg.

  • Verizon had originally agreed to buy Yahoo for $4.8 billion last July. 

  • But after the disclosure of the breaches, Verizon indicated the deal to buy Yahoo's core business could be in jeopardy. It now appears the deal is still in the works and could be announced this week, though it may not close until the second quarter of this year.

Dive Insight:

A discount seems like a better deal for Yahoo that for Verizon. Earlier reports indicated Verizon might ask for a discount of up to $1 billion. Others speculated Verizon could pull out of the deal altogether due to "material breach" should it be found that Yahoo knew about the breaches earlier than revealed. 

Last September, Yahoo disclosed a 2014 cyberattack that exposed the email credentials of half a billion accounts. In December, the company said it had uncovered yet another massive cyberattack wherein 1 billion user accounts were compromised in 2013. Disclosures from Yahoo about the two attacks did not surface until after Verizon agreed to buy Yahoo's primary business in July.

Verizon has been working to shift its business, looking to grow its digital media business as well as focus more on mobile services and connected devices.
 

Filed Under: IT Strategy Security
Top image credit: Eric Hauser