Partnerships / Acquisitions

Without Verizon Yahoo’s Value, Fate Up In The Air

Yahoo’s latest revelation of a massive data breach — this time, potentially impacting 1 billion customers — has led analysts to ponder what the company would look like if Verizon Communications were to walk away from its $4.85 billion purchase of Yahoo’s core assets.

According to a report, if Verizon doesn’t get concessions from Yahoo, including a price reduction, it could walk away, which would result in the value of Yahoo declining. As a result of that prospect, it’s more likely that Yahoo will agree to a price reduction, which some media reports pegged at around $200 million. A discount would reduce the burden on Verizon from future liabilities due to the data breaches and make a deal more palatable. “As we’ve said all along, we will evaluate the situation as Yahoo continues its investigation,” Verizon said in a statement last week, noted the report.

Despite the hacks, Yahoo executives have claimed the company’s business is still strong, with CEO Marissa Mayer saying on an earnings call recently that Yahoo has “launched several new products and showed solid financial performance across the board.”

Earlier this week, the internet giant said in a statement it is confident in its value and that “we continue to work towards integration with Verizon,” according to the report. Last week, Yahoo said it believes an “unauthorized third party” stole data associated with more than 1 billion user accounts in Aug. 2013. That’s in addition to the half-million customers whose data was hacked in another incident that Yahoo disclosed in September. The company believes the Aug. 2013 hack is “likely distinct” from the other incident. In November, Yahoo disclosed in a Securities and Exchange Commission filing that law enforcement provided it with data files that a hacker claimed was Yahoo user data. Upon analyzing it, with the help of outside forensic experts, Yahoo has said it turned out to be the company’s data.

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