Verizon pushes for $1 bln discount on Yahoo deal

Verizon is not happy about Yahoo’s revelation that hackers stole info on more than 500 million user accounts – and now the telco wants to shave $1 billion off its acquisition offer, the New York Post reported.

Verizon said it only learned about the hack of at least 500 million user accounts two days before Yahoo’s disclosure to the public on September 22.

AOL, skeptical about a potential Yahoo lawsuit or two arising from these serious privacy breach concerns, is considering a price reduction in its pending deal with the company.

Yahoo’s bad fortune in recent weeks could come with yet another cost.

While everything is nearly final for Verizon to close the Yahoo deal, a sudden report made Verizon claim $1billion discount on the deal which was supposed to be a deal of $4.8 billion.

Yahoo and Verizon declined comment.

“In the last day we’ve heard that [AOL boss] Tim [Armstong] is getting cold feet”.

Earlier this week, Yahoo was also found to have secretly worked with the U.S. government to scan millions of user emails, according to Reuters.

On Friday, shares of Yahoo! fell 1% to $43.22, while those of Verizon fell 0.7% to $49.92. News of the pending sale broke in July with an eventually agreed upon purchase price of $4.4 billion.

In a statement after the hack was made public, Verizon said: “We understand that Yahoo is conducting an active investigation of this matter, but we otherwise have limited information and understanding of the impact”.

In addition to the $1 billion discount, Verizon is also looking at setting aside another $1 billion as a reserve against liabilities associated with the Yahoo hack, the Post’s sources said.

Armstrong is reportedly in discussions with Yahoo executives over what to do next, while they push back against attempts to lower the price. The sources said Yahoo officials pushed back hard, saying that a deal is a deal, and that Verizon had no legal recourse to change the terms. When the companies announced the deal, which is set to wrap up early next year, Mayer said a priority was “seeing the transaction through to closing and protecting the value in our equity stakes”.

The Post’s sources say Armstrong is trying to reduce the price of the deal, or get out of it entirely.