Yahoo, Verizon now talking about impact of email hack

Verizon and Yahoo’s lawyers began talks for the first time this week about the impact of the big Yahoo email hack, Verizon executives said during the company’s earnings call Thursday.

The talks follow a Verizon Communications hint last week that it wasn’t happy with the latest developments coming from the Silicon Valley internet company it’s buying for $4.3 billion. Yahoo is dealing with fallout from its recent disclosure of a massive data breach affecting at least 500 million of its email users, plus reports that it allegedly scanned incoming user emails for the U.S. government.

Evaluating the “material impact” of the breach is “going to be a long process,” Verizon Chief Financial Officer Fran Shammo reportedly said during today’s call. Although Shammo didn’t indicate Verizon would walk away from buying Yahoo, he suggested the company might look to renegotiate a deal, according to the Wall Street Journal.

It probably doesn’t help that Verizon reported a decline in revenue and in subscriber growth for the quarter. It’s dealing with competition in its wireless business, plus it cited fallout from the Samsung recall of Galaxy Note 7 smartphones. One reason Verizon is buying Yahoo is for an additional revenue stream, and to get a boost in the media and advertising business.

But given Yahoo’s issues, an analyst told the Washington Post that he “can’t think of a reason why Verizon wouldn’t attempt to negotiate a lower price.”

Shares of Verizon are down about 2.6 percent to $49.05. Shares of Yahoo are down about 0.6 percent to $42.48.

 

Photo: Screens full of Yahoo email. (Courtesy Yahoo)

 

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