Data Breaches Seen Unlikely to Derail Verizon Deal With Yahoo

The second major hack of Yahoo user accounts is unlikely to derail Verizon Communications Inc.’s $4.83 billion acquisition of the tech giant, with investors and the public becoming inured to near-daily disclosures of cyberattacks, according to Bloomberg.

Hundreds of U.S. companies fall prey to hackers every year and, in many cases, the data breaches neither hurt bottom lines nor scare away customers for too long. After initial anxieties ease, everyone generally moves on. Experts say the same holds true for Yahoo and Verizon.

Within the past few years, hackers have infiltrated Sony, Target, Home Depot, JPMorgan Chase, EBay and health insurer Anthem. Almost 1,000 data breaches, including Yahoo’s, occurred in the U.S. just this year, according to the Identity Theft Resource Center. And in all, more than 35 million critical personal records, including social security and passport numbers and medical and banking data, were exposed in 2016.

But Yahoo’s is one of the largest-scale data breaches reported to date. The company said that cyber-thieves in 2013 siphoned information from more than 1 billion Yahoo accounts, including users’ e-mail addresses, scrambled account passwords and dates of birth, data that allow criminals to go after more sensitive personal information elsewhere online. It was the second disclosure of a major data breach since Verizon agreed to buy Yahoo.

Still, Yahoo’s costs may be higher simply because of the magnitude of the breach, and may even lead to a loss of users or advertisers. Larry Ponemon, founder of the Ponemon Institute, a think-tank focused on data security, believes Yahoo’s costs, plus opportunities lost, could be $2 to $3 per customer record, and shave $1 billion from the price Verizon pays. Thea may be able to negotiate purchase price down by 5 to 10 percent.

Yahoo said it’s confident in the company’s value and continues to work toward integration with Verizon. Jim Gerace, a spokesman for Verizon, said the company will continue to evaluate the situation before making any final decisions.



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