×
You will be redirected back to your article in seconds

Verizon Hacks $350 Million From Yahoo Deal After Massive Data Breaches

It’s official: Verizon and Yahoo announced that the telco will pay $350 million less for Yahoo’s internet businesses, valuing the deal at about $4.48 billion in cash.

Reports surfaced last week that the Verizon was near a deal with Yahoo to cut as much as $350 million from the deal. The price reduction follow’s Yahoo’s disclosure of two massive user-data breaches affecting more than 1 billion accounts — months after the companies had reached their initial agreement in July 2016.

The deal is expected to close in the second quarter of 2017, the companies said. Under the amended terms, Yahoo will be responsible for 50% of any cash liabilities incurred following the closing related to non-SEC government investigations and third-party litigation related to the breaches. Liabilities arising from shareholder lawsuits and SEC investigations will continue to be the responsibility of Yahoo (which will change its name to Altaba Inc. following the deal closing).

Also under the amended terms, the data breaches — or losses arising from them — will not be taken into account in determining whether a “business material adverse effect” has occurred or whether certain closing conditions of Verizon’s acquisition of the Yahoo businesses have been satisfied.

“The amended terms of the agreement provide a fair and favorable outcome for shareholders,” Marni Walden, Verizon EVP and president of product innovation and new businesses, said in a prepared statement. “It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”

Yahoo CEO Marissa Mayer said in a statement: “We continue to be very excited to join forces with Verizon and AOL. This transaction will accelerate Yahoo’s operating business especially on mobile, while effectively separating our Asian asset equity stakes.”

Verizon wants to couple Yahoo’s 1 billion-plus monthly user base, which includes some 600 million mobile users, with AOL’s audience. “We look forward to moving ahead expeditiously so that we can quickly welcome Yahoo’s tremendous talent and assets into our expanding portfolio in the digital advertising space,” Walden said.

The two hacks Yahoo disclosed forced additional reviews of Verizon’s acquisition and delayed the closing, which originally was expected in Q1. In September 2016, Yahoo announced that information on at least 500 million email accounts was stolen by “state-sponsored” hackers in 2014. That was believed to be the biggest-ever data breach on record until December, when Yahoo disclosed that data from more than 1 billion user accounts was stolen by an unknown party in 2013.

Mayer is expected to join the telco at least for an interim transition period, with AOL CEO Tim Armstrong assuming oversight of the combined AOL-Yahoo group. Armstrong said in an interview last month with Variety that Mayer is “in a mode where she wants to see them through to the next iteration. Then depending on what the next phase is, we’ll make a decision [about her future role].”

Once the Verizon deal closes, Mayer will resign from Altaba’s board along with six other current Yahoo board members. The new Altaba Inc. will primarily be an investment-holding company whose major asset will be shares of China’s Alibaba Group.

More Digital

  • Electronic Arts Logo

    EA Laying Off 350 People, About 4% of Staff

    Electronic Arts is laying off about 350 of its 9,000-person staff, CEO Andrew Wilson announced in a blog post on its website Tuesday. In the brief, open letter, Wilson noted that the move was made to “address our challenges and prepare for the opportunities ahead,” and to “better deliver on our commitments, refine our organization [...]

  • How Will Apple TV+ Impact Netflix?

    How Will Apple TV+ Shake Up Netflix? Analysts Are Split

    Is Apple’s star-fueled streaming service a “Netflix killer” — or just another incremental challenger chasing the market leader? Wall Street don’t agree on whether Apple TV+ will put a big dent in Netflix’s subscriber momentum with the debut of its premium subscription VOD service later this year. At its splashy unveiling Monday, Apple trotted out [...]

  • iHeartMedia Strikes Multi-Year Deal With LiveXLive

    iHeartMedia Strikes Multi-Year Deal With LiveXLive

    iHeartMedia today announced a multi-year agreement with LiveXLive, a digital media company focused on live entertainment. According to the announcement, the deal combines content, production, distribution and promotion. The newly expanded partnership gives LiveXLive exclusive global livestreaming rights for 17 iHeartRadio marquee events this year, including iHeartRadio’s ALTer Ego, iHeartCountry Festival, iHeartRadio Wango Tango, Daytime Stage at [...]

  • Parcast-Spotify

    Spotify Is Buying Parcast, Its Third Podcasting Acquisition This Year

    Spotify announced plans to acquire Parcast, a scripted-entertainment podcast studio — the streaming giant’s third podcasting pickup so far in 2019. Financial terms of the deal weren’t disclosed. Spotify expects the acquisition to close in the second quarter of 2019. The Parcast acquisition comes after Spotify last month paid around $337 million to buy two [...]

  • YouTube logo

    YouTube Denies Report That It's Exiting Scripted Dramas, Comedies

    YouTube claims it is not pulling up stakes from original entertainment — denying a report by Bloomberg over the weekend that the Google-owned video service was cancelling plans for “high-end dramas and comedies” and had stopped taking pitches for “expensive” scripted shows. In a statement, a rep said, “YouTube denies the report” and cited its [...]

  • Apple to Launch New Apple TV

    This Is What Apple's New TV Service Will Actually Look Like

    Apple unveiled its much-anticipated video service at a press event in Cupertino Monday, promising a range of originals via its forthcoming Apple TV+ service as well as easy access to third-party video subscription services. But while many of the big names attached to Apple’s video efforts were known beforehand, one significant detail wasn’t: How are [...]

  • Apple Announces Gaming Subscription Service

    Apple Announces Gaming Subscription Service Apple Arcade

    Apple detailed its long-rumored gaming subscription service during a special event it held in Cupertino, California Monday. Apple Arcade is the world’s first game subscription service for mobile, desktop and living room, the company said. With a single subscription, you get access to more than 100 new and exclusive games. The games won’t be on [...]

More From Our Brands

Access exclusive content