In recent news, we all know that Yahoo faced a hacking issue where many Yahoo accounts were hacked in a short period. That’s a real shame for such a renowned company like Yahoo. Verizon had a deal of $4.8 billion to buy Yahoo. It looks like Verizon will get a reduced price after the hacking embarrassment.
In the new deal, the company will buy Yahoo at $350 million less than $4.8 billion. Now, this is a win for Yahoo. Frankly speaking, a lot of people thought that after such embarrassment, Verizon would either drop the deal or reduce the price to at least a billion dollars from $4.8 billion. Good for Yahoo, Verizon only decreased $350 million.
Well, Yahoo needs to be extremely careful now until the deal is over. If Yahoo faces more problems, then there are chances Verizon will call off the deal. And we have to change our yahoo password for one more time. Apparently, Verizon has lost faith in Yahoo’s 1 Billion current monthly active users.
In a statement, Verizon’s Executive VP said, [quotes quotes_style=”bquotes” quotes_pos=”center”]We have always believed this acquisition makes strategic sense. We look forward to moving ahead expeditiously so that we can quickly welcome Yahoo’s tremendous talent and assets into our expanding portfolio in the digital advertising space[/quotes].
Both Verizon and Yahoo will share legal obligations
Due to the price drop, both Verizon and Yahoo agreed to share both the legal and regulatory requirements. These requirements come from hacks that the website suffered in both 2014 and 2013. At present, Yahoo is under the scrutiny and investigation of US Securities and Exchange Commission. Since Yahoo took too long to inform about the survey, they are under scrutiny.
The acquisition is a part of Verizon’s strategy for boosting the digital advertisement. It is looking to compete with Yahoo and Google. The major assets of Yahoo like Yahoo mail and the fantasy sports still make a lot of money. Verizon will combine AOL with Yahoo. Verizon bought AOL with $4.4 billion in 2015. After the hack had happened in Yahoo, the purchase was delayed.
In the revised deal, Yahoo will pay half of the bill for the NON-SEC government investigations and lawsuit problems. The shareholder lawsuits related to hacking will be the responsibility of Yahoo. There are chances of adjustments in the deal. In the second quarter of 2017, the deal might close. After the deal is over, Yahoo will become an investment company.
It will have a significant stake in the Chinese e-commerce giant Alibaba. It is worth more than $30 billion. According to Yahoo, whatever is left of the company Yahoo will name it as Altaba. It will also reduce the number of board members. Yahoo co-founder David Filo and Mayer will exit the board.