Verizon Hangs Fire on Yahoo Deal -- WSJ
06 January 2017 - 7:02PM
Dow Jones News
Carrier is still studying impact of data breach, leaving $4.83
billion acquisition in limbo
By Ryan Knutson
Weeks after Yahoo Inc. disclosed a second massive data breach,
Verizon Communications Inc. is unsure whether it will proceed with
its $4.83 billion purchase of the internet company's core business,
a top Verizon executive said Thursday.
Marni Walden, a Verizon executive vice president, said the
carrier is still studying the impact of a data breach at Yahoo that
affected more than one billion accounts, which the internet firm
disclosed in December. The hack occurred in 2013 and is separate
from a 2014 breach, disclosed in September, that exposed 500
million Yahoo accounts.
When asked at an investor conference in Las Vegas whether the
telecom giant would proceed with the deal, Ms. Walden said:
"Unfortunately, I can't sit here today and say with confidence one
way or the other because we still don't know."
A Yahoo spokeswoman said: "We are confident in Yahoo's value and
we continue to work towards integration with Verizon."
Ms. Walden's comments echo statements other Verizon executives
made last fall after the disclosure of the first breach. In
October, Verizon's top lawyer signaled it could consider that
breach a material event that could allow it to change the deal
terms. Before the second, larger hack was disclosed, Verizon was
nearing an agreement with Yahoo to simply share in future hacking
liabilities, rather than renegotiate the price.
But the larger hack derailed that plan, as Verizon must again
wait to see what the impact of the new hacking disclosures have on
Yahoo's number of users. Verizon says it still has all options on
the table, including renegotiating the deal's price or walking
away, people familiar with the matter have said.
Shares of Yahoo were up 3% to $41.24 in afternoon trading, while
Verizon shares were little changed at $54.63.
There is still logic to acquiring Yahoo, said Ms. Walden, who
oversees Verizon's digital services and has been closely involved
in the transaction. The idea is to expand Verizon's audience so it
has more advertising inventory. "The merits of that transaction
still make sense, " she said.
To walk away, Verizon will likely have to show that the overall
value of Yahoo has declined as a result of the two hacking
disclosures. It will take weeks before Verizon makes a decision,
Ms. Walden said. "I have to have certain facts in order to be able
to make a good decision," she said. "There's a lot of stuff we
don't know."
Speaking on CNBC earlier Thursday, another Verizon executive,
Tim Armstrong, said he is "hopeful that the deal will continue to
go through."
Mr. Armstrong, who runs the AOL business and was also involved
in the Yahoo deal, said Verizon's goals around adding more eyeballs
is clear, and Yahoo is "one step in that process."
Write to Ryan Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
January 06, 2017 02:47 ET (07:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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