Verizon reaches tentative agreement to lower price of Yahoo deal

Posted February 16, 2017

According to a Bloomberg report Wednesday, the two sides have renegotiated the price, at a cost that's $250 million lower than the original deal.

Yahoo's two data breaches had cast a shadow over the acquisition for Yahoo's core business that was announced in July before the breaches were disclosed.

Both companies say the revised takeover deal will include a provision that Verizon and Yahoo! share the liability for the legal fallout in the case. More than 500 million accounts were affected.

Verizon is most likely to amalgamate its AOL unit - bought in 2015 for $4.4 billion - with Yahoo's search features, mail and messenger services and advertising assets. However, Yahoo has lagged Alibaba's performance over most of the a year ago as its transaction with Verizon was held up.

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After the first breach was revealed, sources said Verizon was going forgo any price reduction. Yahoo reported about $5 billion of revenue previous year for its more than 1 billion users.

Yahoo Chief Executive Marissa Mayer may soon be breathing a sigh of relief.

Meanwhile, Yahoo is subject to a class action lawsuit filed in January accusing management of making "materially false and misleading statements", and failing to disclose Yahoo had not encrypted its users information.

Yahoo shares rose 1.7% to $45.78. "Yahoo's security team was often denied funding and sometimes kept in the dark at Mayer's direction, as she feared more emphasis on security could potentially spur a decline in the company's user base".