With two almost back to back hacks, Verizon has seen its deal price lowered by around $350 million as the deal is expected to draw to a close by Q2, 2016.
Verizon will be required to pay around $350 million less from the earlier agreed upon price of $4.83 billion as part of a revised deal thanks to the two massive security breaches the company suffered in 2013 and 2014. Yahoo had earlier revealed it has suffered the worst hack ever recorded in history twice over. While the first hack compromised the accounts of 500 million users, the second hack turned out to be even bigger in scope with over a billion accounts revealed.
Yahoo is also facing investigations from the US Securities and Exchange Commission for allegedly taking longer than usual to inform its investors of the twin hacks. That again does not round off the woes Yahoo has faced in recent times as the telecommunications behemoth is also come under a lot of heat for siding with the government in assisting them to keep a tab on its user’s emails using specially developed spyware.
All of the scandals had even cast a cloud on the viability of the deal which was announced seven months back, with some speculating the deal might even get scrapped as a worst case scenario. However, from what seems obvious, Verizon continues to repose tremendous faith in Yahoo’s assets and market backed by over a billion user accounts.
All of these, Verizon believes will provide it with a better standing vis-a-vis Facebook and Google by offering enhanced digital advertising space. The revised deal, however, calls upon Yahoo to bear half the costs of all non-SEC government investigations and lawsuits that arise due to the hack. Similarly, Yahoo will also have to all shareholder lawsuits owing to the hacks.
The deal which is expected to come to an end by the second quarter of this year will also bring to an end of the Yahoo journey that we have known of so far. For once its completed, the name ‘Yahoo’ will cease to exist as most of its assets will be merged with Verizon. And whatever that is left of it will be renamed Altaba.