Verizon Explores Lower Price or Exit From Yahoo Deal

Verizon is exploring a price cut or possible exit from its $4.83 billion pending acquisition of Yahoo, after the company reported a second major e-mail hack affecting as many as 1 billion user accounts, according to Bloomberg. While a Verizon group led by AOL Chief Executive Officer Tim Armstrong is still focused on integration planning to get Yahoo up and running, another team, walled off from the rest, is reviewing the breach disclosures and the company’s options, said the person, who asked not to be identified discussing private information.

A legal team led by Verizon General Counsel Craig Silliman is assessing the damage from the breaches and is working toward either killing the deal or renegotiating the Yahoo purchase at a lower price, the person said. One of the major objectives for Verizon is negotiating a separation from any future legal fallout from the breaches. Verizon is seeking to have Yahoo assume any lasting responsibility for the hack damage, the person said.

User data from more than 1 billion accounts was stolen in August 2013, according to a Yahoo statement Wednesday, the second major breach the company has disclosed in the past three months. Given the severity of the hack, which included more than 150,000 U.S. government employees, Verizon is under pressure to reassess the value of the deal and appease shareholders who may see Yahoo as damaged goods.

Verizon has said that the deal, which is expected to close in the first quarter of 2017, still makes sense strategically. The company is hoping to expand beyond its wireless phone service by building a mobile media and advertising business and wants to work the billion or more Yahoo users into the fold.