Yahoo hack renews doubts about Verizon deal

One billion Yahoo accounts hacked

Yahoo’s massive brand new security breach is actually Yet again throwing its deal with Verizon into question.

Yahoo (YHOO, Tech30) stock fell more than 5% in trading Thursday morning following a Bloomberg report that will Verizon (VZ, Tech30) is actually weighing whether to cut the $4.8 billion cost tag of its acquisition or abandon This specific entirely.

“We are confident in Yahoo’s value along with we continue to work toward integration with Verizon,” a spokesperson for Yahoo said in a statement.

Verizon declined to comment beyond an earlier statement on the breach.

“As we’ve said all along, we will continue to evaluate the situation as Yahoo continues its investigation,” Verizon said within the statement Wednesday. “We will review the impact of This specific brand new development before reaching any final conclusions.”

Yahoo disclosed the brand new breach on Wednesday, which may have affected more than one billion accounts. The breach dates back to 2013 along with is actually thought to be separate coming from a massive cybersecurity incident announced in September, which affected at least 500 million accounts.

The latest security breach, likely the largest in history, may give Verizon brand new bargaining power to renegotiate the terms of the original deal. There is actually a possibility of user attrition, lawsuits along with damage to Yahoo’s brand. yet This specific may not scuttle the deal completely.

Verizon agreed to buy Yahoo in July with the goal of using the aging Internet company’s vast audience to compete for online advertising sales against the two dominant players, Facebook (FB, Tech30) along with Google (GOOGL, Tech30).

that will strategy still applies, as long as Yahoo hasn’t lost the majority of its user base.

“At the right cost, This specific’s absolutely beneficial to Verizon. The key word is actually ‘at the right cost.'” says Brian Wieser, an analyst who covers Yahoo for Pivotal Research Group.

Related: Got a hacked Yahoo account? Here’s what you should do

No brand new acquisition cost was mentioned within the Bloomberg report, which cited an anonymous source. After the first hack was disclosed in September, SunTrust analyst Robert Peck estimated This specific could shave $0 million off the deal.

Verizon learned about the original hack months after the acquisition had been announced. Both companies have since admitted the acquisition is actually not a done deal.

“I’ve got an obligation to make sure we protect our shareholders along with our investors,” Marni Walden, Verizon’s head of product, said at an event in October. “We need to have more information before we can determine [what happens to the deal].”

Earlier This specific month, however, AOL CEO Tim Armstrong said he was “cautiously optimistic” the Yahoo deal he had pushed for would certainly actually go through. that will was just days before the second breach was disclosed.

If Verizon were to back out of the deal entirely, This specific would certainly be yet another mark against the leadership of Yahoo CEO Marissa Mayer — along using a particularly costly one for her.

Mayer is actually entitled to a $44 million golden parachute if she is actually terminated after Verizon buys Yahoo, according to a company filing coming from September.

The deal was originally slated to be completed within the first quarter of 2017.

Yahoo hack renews doubts about Verizon deal

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