Yahoo might not be in the best news as news of spying and hacking of its users’ data is going to cost them some huge amount of money even as they are in talks with Verizon to finalize on the intended sale.
According to New York Post, Verizon is asking Yahoo to give it a discount of $1 billion for the finalization of a deal that was originally $4.8 billion. We have some information that Verizon owns TechCrunch.
A partner and legendary M&A lawyer at Sullivan & Cromwell in speaking with TechCrunch said that what will matter is what Yahoo actually disclosed before the deal was signed, adding that it should not come as a surprise that Verizon is asking for a reduction in the price of the deal.
In September last year, Yahoo revealed that its users numbering 500 million had their data breached. Information like email addresses, names, encrypted passwords, birthdays, decrypted and encrypted answers to various security questions were stolen by what Yahoo said was an attacker that was sponsored by the state. Although the passwords that were stolen were encrypted, other information that are available could as well be easily made use of again in other websites that has theft identity schemes.
The breach was said to have happened in 2014, but was only discovered by Yahoo just recently. The time that Yahoo made the discovery could affect the deal. According to Marissa Mayer, CEO of Yahoo, she made the discovery in the early part of July as the sale talk was ongoing. The company told TechCrunch in August that it was aware that there are rumors that its company have been under attack by hackers, but assured that its security team was already on top of the issue. However, in September, a proxy statement that is part of the deal sale, the company such third-party claims of a breach was not in existence.
There has been a call for Securities and Exchange Commission by Senator Warner to look into the cybesecurity representation Yahoo has. According to him, the assertion that Yahoo made in its September filling that it had no knowledge that its IT systems was under attack questions the company’s representation and truthfulness to the public.
Apart from that issue, the company is facing new allegations that its users’ emails were scanned at the order of U.S. intelligence agency.
Yahoo, however, did not disclose the surveillance on users’ data that government actually requested for in its biannual transparency report. The company may have called the mail-scanning program as being misleading, but has is not in denial that such ever took place.
It is the right to the public investors to know changes that a company is undergoing, and could be regarded as breach of security when ignored. This is where Verizon could hang their request for discount. They could claim that such will affect their stock and the Yahoo brand that they are in the process of acquiring.
