- Verizon indicated Thursday that it’s deal to buy Yahoo’s core business could be in jeopardy given Yahoo’s disclosure of a massive data breach last month.
- Verizon’s General Counsel Craig Silliman told reporters that "the impact is material," and could be enough to end the deal, according to The Washington Post.
- This is the first time Verizon has publicly disclosed any uncertainties about the acquisition.
The Yahoo breach continues to serve as a lesson for companies about how not to respond to a cybersecurity incident. Slow to disclose and offering few details on the attack, Yahoo has been under severe scrutiny for the last three weeks.
Verizon's general counsel Craig Silliman said that the burden is now on Yahoo to prove that the breach hasn't damaged its value. If it fails to do so, Verizon could potentially back out of the deal, although he added "we still have a significant way to go in terms of the information we need to get before we can make our final determinations."
Last week, The New York Post reported AOL CEO Tim Armstrong indicated he was "getting cold feet" over the deal. Armstrong, who was tasked with leading the Yahoo integration into Verizon, is "upset about about the lack of disclosure" and is looking for a price cut or an end to the deal.
Verizon agreed to buy Yahoo for $4.83 billion in July, and appeared surprised by the hacking revelation last month. If an investigation reveals that Yahoo knew about the breach prior to the sale, lawsuits and potentially even criminal proceedings could be forthcoming.