Hacking and spying scandals could come at a major price for Yahoo
If you were wondering how Yahoo's belated revelation that it suffered a hack of 500 million accounts two years ago might affect its recently agreed acquisition, it looks like it could make a billion dollars' worth of difference.
According to the New York Post, Verizon are pushing for $1bn to be shaved off its pending $4.8bn purchase of one of the original internet giants.
Verizon's case was likely made stronger this week, after it emerged that Yahoo had been ordered by a secret Foreign Intelligence Surveillance Court in the US to scan emails for terrorist signatures. The company then created a custom piece of software which searched users' mail for the information, Reuters reported.
The Post quoted a source close to the matter as saying of Tim Armstrong, chief executive of the Verizon-owned AOL:
"In the last day we've heard that Tim is getting cold feet. He's pretty upset about the lack of disclosure and he's saying can we get out of this or can we reduced the price?"
Discussion between the two US companies are ongoing, with Armstrong apparently having flown to the West Coast in recent days.
He told CNBC last week that "the data thing was something new that got introduced and we’ll work through that together with [Yahoo]." How it pans out could hinge on how much Verizon knew about the data breach when the deal was being done. Yahoo CEO Marissa Mayer reportedly learned of the breach as early as July, while negotiations were still ongoing.
Verizon made the move for Yahoo to combine its core assets with AOL, which it also snapped up for $4.4bn last year
Yahoo's next board meeting is in two weeks. In the meantime, Mayer will be looking to remain firm in the face of Verizon's haggling and steady the leaky Yahoo ship.