Yahoo Has Amended $4.8B Verizon Sale
- Author: Arturo Norris Feb 22, 2017,
Feb 22, 2017, 20:07
"Although Verizon today is a $126 billion business (2016 revenues), it has only 114.2 million retail connections", TechCrunch said, noting that it is picking up Yahoo's more than 1 billion users, and digital content, for "a relatively small fee".
The deal between Verizon and the once-upon-a-time web giant, Yahoo, was originally announced in June last year, but following several revelations about hacks which had hit the company in recent years, it seemed clear Verizon wasn't quite as keen. The company chose to proceed in part because it continued to believe that the deal made strategic sense and that users were loyal and engaged. Just last week, Yahoo sent out warning letters to users saying their accounts may have been compromised through a forged cookie scheme apparently related to the 500 million account breach announced last September. The closing of the transaction had been delayed as Verizon and Yahoo assessed the fallout from the data breaches, which Yahoo disclosed past year. "The amended terms of the agreement provide a fair and favorable outcome for shareholders". The data breaches would not be taken into account if certain closing conditions have been satisfied.
Under the revised terms of the deal, Yahoo would have to pay any fine it could be issued by the SEC and would be responsible for any other liabilities stemming from "shareholder lawsuits". The final deal is now expected to close in the second quarter, though there may be some delay for the integration of all of Yahoo's services with Verizon's business due to the hacks, as per Reuters.
The acquisition of Verizon to Yahoo would create one of the largest portfolios of owned or partnered global brands.
Under the newly-amended deal, Yahoo will have to cover at least 50 percent of any cash liabilities that would have accrued at closing, in relation to related government investigations and and breach-related lawsuits. Verizon will combine Yahoo's advertising technology tools as well as its search, email and messenger assets with its AOL unit, purchased for US$4.4bil (RM19.6bil) in 2015. "We have long believed that Yahoo Mail is the service that generates most of the usage and should users leave Yahoo, then the value that Verizon is attributing to Yahoo will have to be written off". We have a terrific, loyal, experienced team at Yahoo. A similar revelation followed in December of previous year, when Yahoo stated that a separate security breach in August 2013 had exposed the names, emails, and hashed passwords of more than a billion users.