Verizon is definitely feeling some serious buyer’s remorse. Verizon threatens to bail on Yahoo purchase after Yahoo was hacked and at least 500 million accounts were compromised. This was one of the largest data breaches in history.
Verizon Threatens to Bail on Yahoo
The hack happened back in 2014, but Yahoo just now discovered it in August. Verizon’s general counsel, Craig Silliman, has been led to believe that there is a “reasonable basis” to believe that the hack qualifies Verizon to pull out from their deal in place to buy Yahoo. The deal had Verizon set to purchase Yahoo for 4.83 billion, per Reuters.
“I think we have a reasonable basis to believe right now that the impact is material, and we’re looking to Yahoo to demonstrate to us the full impact. If they believe that it’s not, then they’ll need to show us that,” Silliman said.
For now, Verizon is waiting for the Yahoo investigation into the incident to conclude. Yahoo has confirmed that the person information of over 500 million accounts was compromised. The company maintains that credit card and bank information was not targeted by the hackers. Additionally, there is no evidence that the hackers still have their access.
It is very likely that these actions by Verizon are to simply lower the purchase price. After all, this does give them a great deal of power in negotiations. Verizon has hopes of competing with Google and Facebook and getting Yahoo at a cheaper price would help them do so.
Why are they so interested in the purchase of Yahoo? Yahoo has been estimated to be worth between 5 and 8 billion. It includes the email service, the search engine as well as many very popular web publications. On top of that, Yahoo’s advertising division is extremely profitable. It commands an estimated 1.5% of the market.