Yahoo purchase ‘absolutely’ makes sense, but Verizon wants answers: reports

Verizon believes its planned purchase of Yahoo still makes sense after Yahoo failed for almost two years to notice it was the victim of the world’s largest data breach — but the telecommunications giant still needs answers from Yahoo.

That’s according to Verizon executive vice-president Marni Walden, who spoke at a Wall Street Journal tech conference October 26.

“I’ve got an obligation to make sure that we protect our shareholders and our investors, so we’re not going to jump off a cliff blindly,” said Walden, according to a Reuters report.

Walden stressed that the deal would let Verizon accomplish its goal of merging its AOL subsidiary with Yahoo’s users to take on Facebook and Google in online advertising.

“You bring them together, and you can be a relevant third player in this space,” she said.

Verizon said earlier that the hack was a “material” issue with regard to the sale.

But buying Yahoo still “absolutely” makes sense for Verizon, Walden said, according to Variety.

Verizon needs up to 60 days to resolve questions about the breach, Walden said. “Yahoo is conducting their investigation. There is a lot of information that Verizon still needs,” she said.

Yahoo revealed last month that personal data from more than 500 million user accounts had been stolen about two years previously. The firm said it had recently discovered the breach.

Walden did not rule out the possibility her firm would withdraw from the $4.8 billion acquisition. “Asked whether there were any circumstances under which Verizon could back out of the deal, she quipped, ‘Why don’t we move on to your next question?'” Reuters reported.

Walden said Verizon, to gather revenue from online advertising, plans to produce its own original content, but in short form, rather than making another Game of Thrones, according to Variety.

Rather than creating content for an existing market, as AT&T intends with its planned acquisition of Time Warner, Verizon wants to open new markets among younger people, Walden said.

Analysts have theorized that Verizon could seek to negotiate a lower price for Yahoo in consideration of the breach, possibly getting a $1 billion discount.

Yahoo was hit with a subsequent scandal this month, when reports suggested the company had given in without a fight to a federal intelligence court order to scan users’ email in real time on behalf of the FBI.

On Oct. 25, nearly three dozen groups including the American Civil Liberties Union and Electronic Frontier Foundation sent a letter to U.S. director of national intelligence James Clapper, saying the scanning may have violated Americans’ Constitutional right to live free from unreasonable search and seizure. The groups demanded Clapper release the intelligence court order compelling the surveillance.

 

Yahoo on Oct. 19 had sent Clapper a letter, asking him to confirm whether such an order was issued, to declassify all or part of it, and publicly explain “the alleged facts and circumstances.”

Photo: Yahoo headquarters in Sunnyvale (LiPo Ching/Bay Area News Group)

 

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