Yahoo slashes price of Verizon deal $350 mn after data breaches


But on Tuesday, the two companies agreed to a discount of $350 million, or about 7 percent.

Verizon Communications - the mobile phone company that is buying Yahoo's core internet business - has knocked $350 million (332 million euros) off the purchase price. The closing of the transaction had been delayed as Verizon and Yahoo assessed the fallout from the data breaches, which Yahoo disclosed past year.

Yahoo's massive data breach has officially caused more than customer headaches. "Were there a few? We still think this is a good deal for us".

Yahoo is facing more than two dozen class-action lawsuits by users and at least one by shareholders over the hacks. Verizon's demands had held-up completion of the deal.

Yahoo is now facing multiple law suits on the account of negligence.

"The looming legislation around GDPR has already established cyber security and breach readiness as topics requiring serious attention from business executives, due to the eye-watering fines of €20m or 4% of global annual turnover for non-compliance".

"The damage to reputation and brand has always been a primary reason for concern for organisations that were not seen to be implementing sufficient housekeeping and security controls, but huge ICO fines coupled with real damage to a company valuation will ensure that cyber security related issues become an even higher priority", said Norris. That means Verizon will pay $4.48 billion for the company, down from the originally announced $4.83 billion.

Under the new deal Yahoo and Verizon will split the cost of some lawsuits arising from the data breaches. Bloomberg then reported that Verizon might try to scuttle the deal if they didn't get a revision of the standing agreement. It "further devalues [Yahoo's] price. It's a very good thing for us". Verizon could also become a major media company by owning the extensive reach of Yahoo's news, sports, and finance sections.

The agreement should be a welcome relief to Yahoo investors. Under Tuesday's deal, Altaba will assume liability for the SEC investigation.

Why would Verizon continue to pursue the Yahoo deal despite the risks? It was expected that the terms would suffer some changes, including a price tag cut, something that has finally been confirmed.

The acquisition had been agreed in July a year ago following an auction in which Verizon emerged the lucky victor.

Yahoo isn't getting off scot-free.

Against these online destinations, Verizon expects to sell advertising to the millions of people who visit those sites every month, not to mention gather up all the behavioral data they generate. The U.S. Senate has also begun probing Yahoo over the breach.

Verizon wants a slice of those revenues.

While the number has come up from $250 million in recent week, the latest rebate is still a little more than a third of the $1 billion that Verizon reportedly asked for previous year in July.

"It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty", Mayer said of the transaction.



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