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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.
Massive money pit.
I'd be demanding that Yahoo! pays me to take it over.
I'd then rename it WooHoo! and not change a thing. In a few years, there would be some other scandal at WooHoo! but I wouldn't give a shit because I'd already have my hundreds of millions of dollars and would probably be running as a Republican Presidential candidate with Carly Fiorina.
Amateurs.
With Yahoo circling the drain, doesn't Verizon just have to threaten to draw them into some protracted legal fight about the deal (even if they would eventually lose) until Yahoo is even more broken then they are already?
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.
moox. for a new generation.
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?
Ken
ahoo is telling Verizon that a deal is a deal and that telecom giant has no legal recourse to change the terms
Doesn't gross misrepresentation count? If I buy a used car that's representation as having 10K miles but it really has 80K miles because someone rolled the odo and lied about it, that does mean I have legal recourse after the sale. It's not that "a deal is a deal". If one party is lying about what is being sold, that matters.
Same for houses and other things. The law does give one party recourse if the other party lied through their teeth about what they were selling.
Also, even with a 1B discount, Verizon is still paying WAY more than Yahoo is worth.
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.
I didn't even know Rancid broke up, let alone that their singer went on to run Verizon.
Yahoo! and AOL may be somewhat toxic amongst techies, but I'm not sure that's the case with the general public. Have a look at this, for example; they generally seem to have a pretty good rep. with Joe Public.
Oh no... it's the future.
Doesn't look like Marissa and term understand the concept of material disclosure in contract law.
http://www.nolo.com/legal-ency...
Excerpt:
Misrepresentation
If fraud or misrepresentation occurred during the negotiation process, any resulting contract will probably be held unenforceable. The idea here is to encourage honest, good faith bargaining and transactions. Misrepresentations commonly occur when a party says something false (telling a potential buyer that a house is termite-free when it is not) or, in some other way, conceals or misrepresents a state of affairs (concealing evidence of structural damage in a house's foundation with paint or a particular placement of furniture).
Nondisclosure
Nondisclosure is essentially misrepresentation through silence -- when someone neglects to disclose an important fact about the deal. Courts look at various issues to decide whether a party had a duty to disclose the information, but courts will also consider whether the other party could or should have easily been able to access the same information. It should be noted that parties have a duty to disclose only material facts. But if Party A specifically asks Party B about a fact (material or non-material), then Party B has a duty to disclose the truth.
A more extensive discussion of the topic:
http://scholarship.law.berkele...
So, they're factoring in their potential liability from Yahoo's failure to secure its systems and/or notify its customers of a security breach in a timely fashion at $2 per user? I wonder if they hired the same folks as Bank Of America used when deciding whether or not buying Country Wide Mortgage was a good idea?
If I were Yahoo I'd be asking for a billion more in compensation for its name being dragged through the mud of an association with Verizon. Yes, Yahoo has a bad rep, but is Verizon's better? Yahoo strikes me as a guilty schoolboy covering up a crime just to save its ass, whereas Verizon is the kid who tears the wings off flies and loves torturing animals.
'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
"Verizon had been planning to couple Yahoo with its AOL unit "
Yahoo plus AOL. Lolz guaranteed.
I agree with you Hadlock, They might as well try to acquire Comcast and throw it in with Yahoo and AOL resulting in a company that everyone would hate. People may actually just pay the newly formed company from the three to have it just leave them alone.
Building a coalation of toxic brands liket Yahoo and AOL seems like a pretty poor business strategy,
Is it too late for Verizon to buy Radio Shack?
Yeah, this has a material affect on the company. $1bn USD? Make it $1.5bn.
Verizon is going to put AOL and Yahoo back on track? They expect to double the userbase in 4 years?
Every Verizon portal and web service in the history of the company has sucked. The best they ever managed was being ugly and obsolete on release.
And who can forget the god-awful software on their cable boxes? It took them years to get consistent HDMI output to brand name AV equipment. How the hell Do you deploy a box that can't work with Samsung TVs or Pioneer receivers (among others)?
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According to the latest ruleset, this post should be modded as Vorpal Flamebait +5.
She's been terrible for the Yahoo brand. Overcompensated and underperforming.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
And now Yahoo has been sued for going overboard on their SJW bias.
IMHO Yahoo should take the deal before Verizon comes to it's senses and realises what they are buying.
Verizon didn't have any reason to buy yahoo (AFAIK) other than hey look at all this extra money we have what can we spend it on?
Minimum threshold fixed. Thanks!
They better sell it fast before the next scandal surfaces...
...because who wants to bet Verizon is/has been doing it too?
Awwwww.... did someone get downsized?
Let's tie these rocks together, surely they'll float now! == most mergers and acquisitions.
Why guess when you can know? Measure!
Go ahead and try to sue them if they back out of the deal, Marissa. They can bleed you to death with all the legal fees.