Verizon Wants $1 Billion Discount On Yahoo Deal After Reports of Hacking, Email Scanning (nypost.com)

As if Yahoo's reputation couldn't get any worse after the company revealed a massive data breach that occurred in 2014, compromising at least 500 million accounts, Reuters issued a report claiming the company secretly scanned customer emails for U.S. intelligence agencies. These reports certainly don't look good to the companies looking to acquire Yahoo, like Verizon, which has been nearing a deal since late July. Now, it appears that Verizon wants a $1 billion discount off its $4.83 billion deal to buy Yahoo. New York Post reports: Verizon is pushing for a $1 billion discount off its pending $4.8 billion agreement to buy Yahoo, several sources told The Post exclusively. "In the last day we've heard that Tim [Armstong] 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 reduce the price?" said a source familiar with Verizon's thinking. That might just be tough talk to get Yahoo to roll back the price. Verizon had been planning to couple Yahoo with its AOL unit to give it enough scale to be a third force to compete with Google and Facebook for digital ad dollars. The discount is being pushed because it feels Yahoo's value has been diminished, sources said. AOL/Yahoo will reach about 1 billion consumers if the deal closes in the first quarter, with a stated goal to reach 2 billion by 2020. AOL boss Tim Armstrong flew to the West Coast in the past few days to meet with Yahoo executives to hammer out a case for a price reduction, a source said. "Tim was out there this week laying the law down and Marissa is trying to protect shareholders," said a source close to talks. "Tim knows how to be fair, while Verizon is pushing him, he can bridge the gap." At the same time, the Yahoo deal team is pushing back hard against any attempts to negotiate the price down, sources said. Yahoo is telling Verizon that a deal is a deal and that telecom giant has no legal recourse to change the terms.

Comments

I question the strength of Yahoo and AOL brands...

[Hadlock]

Building a coalation of toxic brands liket Yahoo and AOL seems like a pretty poor business strategy, I don't think the Verizon brand can lift them up, if anything those brands will drag Verizon down. In terms of long-term business strategy you'd need an incredible turnaround CEO at each to somehow leverage this deal. I can't see anyone worth their salt wanting to attach their name to this gambit. The whole thing sounds half baked and that's a lot of money for a half baked idea.
 
Disney got Star Wars for $4 billion. Are you saying the whole Yahoo brand is bigger than Star Wars? Especially with the government spying attached to it? I would run - not walk away from this deal.

Aw, how cute - look at Yahoo playing tough

[kenh]

Yahoo is telling Verizon that a deal is a deal and that telecom giant has no legal recourse to change the terms.

Sounds nice, I'm certain there's a path out of the deal for Verizon, maybe after paying a token "penalty", then Yahoo will be free to explore all those other hundreds and hundreds of other offers they've had... And then, after Yahoo sits unsold for a few months, it's stock tanking, Verizon can come in and offer a revised price for the company that reflects it's new (lowered) stock price and damaged reputation.

Yahoo is circling the bowl, Verizon is offering them a lifeline. What does Yahoo have that Verizon needs and couldn't build for less than the $3BN it is offering for Yahoo?

Well congratulations, Marissa

[MikeRT]

You were worried that a mandatory password reset would drive users away. This is what happens when you insist on violently forcing the cat back into the back. All you end up with is a torn bag, cat that is seeing red and people questioning your judgment.

Here are a few ideas...

1. Instead of buying Tumblr, you should have bought DropBox and made it Yahoo's answer to Google Drive. Keep the APIs open, keep the engineering team. Tell them do what you do best and let us know how the rest of Yahoo can help you.
2. Go nuts on turning Yahoo email into something better than GMail.
3. Build a system around Flickr to make it really easy for photographers to monetize their work.
4. Go the Netflix route of hiring people with movie and TV experience to create original content with real budgets.

I mean FFS, it would have been safer for her to spend $100M buying the rights to Firefly and relaunching a few seasons than some of the garbage she's pulled.