Yahoo Acquisition Price May Be Reduced After Massive Data Breach

According to a recent article in the New York Post, the Yahoo acquisition price may be reduced following the massive data breach that was reported to have affected 500 million users. Prior to the announcement of the data breach, Verizon was due to buy Yahoo for $4.8 billion. The deal was arranged before news of the data breach broke, but not before the data breach actually occurred.

The deal was arranged over the summer, but two weeks ago news broke that the credentials of hundreds of millions of Yahoo users had been stolen by hackers. As if that was not enough bad news, last week two former Yahoo employees revealed that Yahoo had been secretly scanning users email accounts at the request of either the NSA or FBI. Last year, it is alleged that Yahoo built the software to enable a government agency to spy on emails. Specifically, to search for keyword phrases related to terrorist activity.

The revelations appear to have placed the Verizon deal in jeopardy. Some industry experts have said that Verizon may actually now choose to back out of the deal or seek a price reduction. In the past few days it seems that Verizon is attempting the latter. The New York Times reports that a request has been made to reduce the Yahoo acquisition price by almost a quarter. Verizon has reportedly asked for the Yahoo acquisition price to be reduced by $1 billion.

Verizon are apparently unhappy about the lack of disclosure. Verizon was only informed of the hacking of Yahoo accounts two days before the public announcement was made, even though Yahoo was aware of the breach for many weeks prior to the announcement.

Some privacy experts believe that far from email scans being conducted only for terrorist signatures, unconstitutional searches may have been performed. Yahoo has responded to media reports about the spying claiming “Yahoo is a law abiding company, and complies with the laws of the United States,” and calling the media report of the spying misleading.

However, both bombshells will have had an impact on users of Yahoo services and Verizon appears to think a discount is in order due to the reduction in value of the company following the disclosures. However, as far as Yahoo is concerned, the deal had been arranged and Verizon has no legal recourse for reducing the price or pulling out of the deal.

Author: Richard Anderson

Richard Anderson is the Editor-in-Chief of