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January 24, 2017

Yahoo, Verizon deal faces delays following mega data breach

Yahoo CEO Marissa Mayer was keen to stress that 'the opportunities ahead with Verizon look bright' despite the delay.

By CBR Staff Writer

Yahoo has announced that it will need more time to complete the sale of its web operations to Verizon.

The company now expects the deal to be closed in the second quarter of this year as it requires more time to finish the work needed to meet closing conditions.

Earlier, it expected that the transaction to be completed in the current quarter.

The company stated: “Yahoo has continued to work with Verizon on integration planning for the sale of its core business.

“The company is working expeditiously to close the transaction as soon as practicable in Q2.”

In July last year, Telecoms giant Verizon will pay $4.8bn to acquire Yahoo’s core internet business and some real estate assets.

But the revelations of cyber attacks on Yahoo had raised doubts on the fate of the deal.

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READ: Is Verizon, Yahoo deal set for £2bn data breach discount?

In October, it was discovered that a cyber attack on Yahoo in 2014 led to a breach of over 500 million email account details on the network.

The situation worsened when Reuters revealed in a report that Yahoo had secretly built a software programme that would search customer emails for specific information requested by US intelligence officials at the National Security Agency or FBI.

In December, Yahoo disclosed the details of another data breach that took place in 2013. The breach saw cyber attackers stealing the details of more than one billion user accounts of Yahoo.

The Wall Street Journal reported that the US Securities and Exchange Commission has launched a new investigation into a previously disclosed data breach.

The purpose of the probe is to find whether Yahoo should have reported its two massive data breaches sooner to investors.

However, the company reported better-than-expected earnings for the fourth quarter of 2016. Revenue rose 15.4% to $1.47bn in the October-December compared to the same period a year earlier.

Its net income of $162m in the quarter compared to a loss of $4.43 billion in the year-ago quarter.

Yahoo CEO Marissa Mayer said: “With our 2016 and Q4 financial results ahead of plan, and the continued stability in our user engagement trends, the opportunities ahead with Verizon look bright.”

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