Source:computerworld.com

Thanks to another hack attack that Yahoo suffered, its investors are afraid that recent data breach might bring the price, which Verizon Communications Inc. is willing to pay for this internet company, even more down. If this happens, then Verizon is in luck because they will be able to purchase Yahoo for a bargain price. This, on the other hand, means that the Yahoo Inc. investors should be terrified.

Apparently, Yahoo announced, on Wednesday, that they experienced an even larger hack on its users than the previously disclosed breach, which is already being discussed as the biggest theft of user data in history. If you didn’t know, the first hack (revealed in September) that hit Yahoo (YHOO, -3.37%) managed to access more than 500 million accounts, Yahoo now reports that this recent one (on Wednesday) affected more than 1 billion users, which is more significant and dangerous.

If you recall, Verizon Communications Inc. (VZ, +0.37%) approached to buy Yahoo earlier this year with the offered price at $4.8 billion, and that deal is not yet closed. Due to that purchase agreement Yahoo had to disclose both hack attacks, and since then we know that Verizon’s general counsel told reporters, back in October, that the company believes that the previous hack made a “material change” in the deal. The New York Post, soon after that statement disclosed that Verizon was seeking a discount of about $1 billion in its purchase price, thanks to the first intrusion Yahoo suffered.

If you do the math, thanks to this latest hack attack being two times worse than first, it is only logical that Verizon should ask for a $2 billion discount now. The company didn’t rush to do so, but a source close to them (Verizon) stated for The Wall Street Journal that “all options were on the table” including renegotiation of the price or walking away from the entire deal. As a result of the whole situation Yahoo’s shares fell 2.4% in after-hours trading while shares of Verizon spiked up.

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Source:techweez.com

“Deals like this include “material adverse change” clauses as well as certain closing conditions that each might give Verizon an exit option or the opportunity to renegotiate the deal” was stated in an email by Stephen Diamond, an associate professor of law at Santa Clara University. We searched for this clause and indeed found it in the deal thanks to Yahoo’s regulatory filings. If Verizon is smart, and we do not doubt that they are, they will exercise this clause without hesitation. But when you put yourself in shoes of a company such as Yahoo, then you get to see first hand another example of the company’s inability to pull itself out of a depressing and public downfall that will without a doubt forever damage the legacy of one of the online pioneers.

“The fact that Yahoo has not been able to preempt these attacks, or identify their causes more quickly, is a colossal failure on their part” as said by, Chief Executive of data security startup BigID. Yahoo is still a strong company which still has millions of eyes visiting its sites, but Verizon will have to be smart here and calculate if the security unpleasantness that happened really is worth the price of those eyes, well at least if the Yahoo price doesn’t go down even more.

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