It hasn’t been a good year for Yahoo. In September, the company announced the breach of over 200 million user accounts in 2012. A few months later it revealed a subsequent hack of one billion accounts in 2013. To put the icing on the cake, Yahoo disclosed a cookie forging issue last week that likely resulted in the hack of accounts from 2015-16.
The result has been a sharp drop in public image for Yahoo, and it’s had an effect on Verizon’s bid for the company’s operating business. Verizon’s initial bid of 4.8 billion has been knocked down to 4.48, with a $350 million reduction.
Though it’s not much in the grand scheme of things, another clause may prove more expensive. Under a new agreement, Yahoo will share 50 percent of any cash liabilities that come from SEC investigations and third-party breach litigations.
Not Dropping Out
The move comes amid speculation that Verizon would drop out of the bid entirely. However, the purchase still has considerable advantages:
“We have always believed this acquisition makes strategic sense,” said Verizon vice president Marni Walden. “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.”
Walden believes the new terms “provide a fair and favorable outcome for shareholders”. Yahoo’s users will still make it a solid purchase for the company, extending its online reach. With the combination of AOL and Yahoo, Verizon will have a huge portfolio of owned and partnered global brands.
“It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty,” said Yahoo CEO Marissa Mayer.
The two expect the deal to close in the second quarter.