Following the series of unfortunate data breaches that have befallen internet giant Yahoo in recent months, a planned deal for acquisition by Verizon may be scuttled since the latter begs to study the impact of the security hacks more before deciding on whether to go ahead with the takeover or simply to walk away, USATODAY writes.
Verizon had planned to acquire Yahoo for $4.8 billion, but with the wave of data breaches hitting the company’s many users, executive vice president and president of product innovation at Verizon, Marni Walden, revealed that “we still don’t know” whether to go ahead with the planned purchase or to turn their backs on the proposed deal.
Yahoo suffered a security breach in 2013 and another one which exposed over 500 million users in 2014. Then in December 2016, over one billion Yahoo users got their personal details breached, prompting Yahoo to recommend password-change among other preventive measures to reduce chances of hacking into personal users accounts.
But these developments are casting doubts in the minds of top Verizon executives and making them to reconsider moving ahead with the deal. Verizon’s general counsel, Craig Silliman, had earlier voiced his concerns with the takeover, now Ms. Walden’s comments are lending weight to speculations of withdrawal from the deal.
But an earlier comment by Walden that the proposed “made sense” helped Yahoo’s shares to rise 3% to reach $41.24, but not up to Verizon’s which remained fairly constant at $54.63.
But all hope on purchasing Yahoo is not lost because Verizon says they have a lot of options on ground for the deal to proceed. One of these is to renegotiate for the initial $4.8 billion price to be reduced to accommodate business fears concerning the acquisition, and the second is for Yahoo to demonstrate the full impacts of the data breaches on its teeming users.
“I have to have certain facts in order to be able to make a good decision,” Walden had said. “There’s a lot of stuff we don’t know.”
According to stats from eMarketer, Yahoo made a earning of $2.98 billion from online ads in 2016 as against the $63.1 billion made by rival Google and the $25.9 billion realized by Facebook, while Alibaba had corralled $12.7 billion within the same period.