Saturday , 22 October 2016
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Yahoo's Data Breach May Hurt Its $4.83 Billion Deal with Verizon

Verizon’s deal to buy Yahoo for $4.83 billion could be on shaky ground after the Internet company disclosed last month a 2014 data breach that affected at least 500 million Yahoo accounts.

The breach — one of the largest in the history of cyberattacks — included user data such as email addresses, dates of birth, encrypted passwords and security answers.

Yahoo said in September that it was not aware of the cyberattack when it signed the deal with Verizon in July of this year. Verizon didn’t find out about it until the week the breach was made public. A spokesman for the telecommunications firm said at the time that the company had limited information and was not yet sure of its ramifications.

On Thursday, Verizon general counsel Craig Silliman told reporters in Washington D.C. that the breach may affect the deal.

“Based on what we know so far, we have reason to believe that Yahoo’s data breach has had a material impact,” Silliman said.

Verizon declined to provide further comment.

“We are confident in Yahoo’s value and we continue to work towards integration with Verizon,” a Yahoo spokeswoman said.

The New York telecommunications company in July offered to buy Yahoo’s core assets — including its websites, email service and apps — extending a lifeline to a once-dominant Internet company that for years has bled cash and lost users to newer competitors.

It’s not unusual for data breaches to affect acquisition deals, according to technology analysts, who said buyers have been known to ask for discounts or pull out of deals entirely because they don’t want to inherit the other company’s problems.

The New York Post, citing unnamed sources, reported this month that Verizon might be seeking a $1 billion discount on Yahoo because of the data breach.