Verizon Wants $1 Billion Discount On Yahoo Deal After Reports of Hacking, Email Scanning (nypost.com) 77
As if Yahoo's reputation couldn't get any worse after the company revealed a massive data breach that occurred in 2014, compromising at least 500 million accounts, Reuters issued a report claiming the company secretly scanned customer emails for U.S. intelligence agencies. These reports certainly don't look good to the companies looking to acquire Yahoo, like Verizon, which has been nearing a deal since late July. Now, it appears that Verizon wants a $1 billion discount off its $4.83 billion deal to buy Yahoo. New York Post reports: Verizon is pushing for a $1 billion discount off its pending $4.8 billion agreement to buy Yahoo, several sources told The Post exclusively. "In the last day we've heard that Tim [Armstong] is getting cold feet. He's pretty upset about the lack of disclosure and he's saying can we get out of this or can we reduce the price?" said a source familiar with Verizon's thinking. That might just be tough talk to get Yahoo to roll back the price. Verizon had been planning to couple Yahoo with its AOL unit to give it enough scale to be a third force to compete with Google and Facebook for digital ad dollars. The discount is being pushed because it feels Yahoo's value has been diminished, sources said. AOL/Yahoo will reach about 1 billion consumers if the deal closes in the first quarter, with a stated goal to reach 2 billion by 2020. AOL boss Tim Armstrong flew to the West Coast in the past few days to meet with Yahoo executives to hammer out a case for a price reduction, a source said. "Tim was out there this week laying the law down and Marissa is trying to protect shareholders," said a source close to talks. "Tim knows how to be fair, while Verizon is pushing him, he can bridge the gap." At the same time, the Yahoo deal team is pushing back hard against any attempts to negotiate the price down, sources said. Yahoo is telling Verizon that a deal is a deal and that telecom giant has no legal recourse to change the terms.
I wouldn't take Yahoo if you gave it to me. (Score:1)
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Not the same "hack". This is about the leak of 500 million of yahoo users' emails, passwords, etc. That has nothing to do with malware being served through yahoo ads that you linked to.
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I would... and then I'd sell it to Verizon at a discount of $1billion to ensure I got rid of it quickly.
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"Verizon had been planning to couple Yahoo with its AOL unit "
Yahoo plus AOL. Lolz guaranteed.
Only a billion? (Score:5, Funny)
I'd be demanding that Yahoo! pays me to take it over.
I'd then rename it WooHoo! and not change a thing. In a few years, there would be some other scandal at WooHoo! but I wouldn't give a shit because I'd already have my hundreds of millions of dollars and would probably be running as a Republican Presidential candidate with Carly Fiorina.
Amateurs.
Legal stalling (Score:3)
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With Yahoo circling the drain, doesn't Verizon just have to threaten to draw them into some protracted legal fight about the deal (even if they would eventually lose) until Yahoo is even more broken then they are already?
Suppose Verizon engineered the Hack of Yahoo, so that they get the user list and as many passwords as possible. Now, two years later, they want to benefit once again from their 2014 hack, to try to force yahoo.com to reduce it's price by one billion.
If yahoo.com can do it, they should tell Verizon to go suck a lemon.
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Awwwww.... did someone get downsized?
I question the strength of Yahoo and AOL brands... (Score:5, Insightful)
Building a coalation of toxic brands liket Yahoo and AOL seems like a pretty poor business strategy, I don't think the Verizon brand can lift them up, if anything those brands will drag Verizon down. In terms of long-term business strategy you'd need an incredible turnaround CEO at each to somehow leverage this deal. I can't see anyone worth their salt wanting to attach their name to this gambit. The whole thing sounds half baked and that's a lot of money for a half baked idea.
Disney got Star Wars for $4 billion. Are you saying the whole Yahoo brand is bigger than Star Wars? Especially with the government spying attached to it? I would run - not walk away from this deal.
Re:I question the strength of Yahoo and AOL brands (Score:5, Informative)
Yahoo! and AOL may be somewhat toxic amongst techies, but I'm not sure that's the case with the general public. Have a look at this [statista.com], for example; they generally seem to have a pretty good rep. with Joe Public.
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Building a coalation of toxic brands liket Yahoo and AOL seems like a pretty poor business strategy,
Is it too late for Verizon to buy Radio Shack?
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Aw, how cute - look at Yahoo playing tough (Score:5, Insightful)
Sounds nice, I'm certain there's a path out of the deal for Verizon, maybe after paying a token "penalty", then Yahoo will be free to explore all those other hundreds and hundreds of other offers they've had... And then, after Yahoo sits unsold for a few months, it's stock tanking, Verizon can come in and offer a revised price for the company that reflects it's new (lowered) stock price and damaged reputation.
Yahoo is circling the bowl, Verizon is offering them a lifeline. What does Yahoo have that Verizon needs and couldn't build for less than the $3BN it is offering for Yahoo?
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"What does Yahoo have that Verizon needs and couldn't build for less than the $3BN it is offering for Yahoo?"
Users and data about the users. Information.
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Yeah, but now Verizon can get all that for free, just like everyone else.
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eyeballs.
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And losing money hand over fist.
The same as Twitter.
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What does Yahoo have that Verizon needs and couldn't build for less than the $3BN it is offering for Yahoo?
Patents?
a deal is not always a deal (Score:1)
ahoo is telling Verizon that a deal is a deal and that telecom giant has no legal recourse to change the terms
Doesn't gross misrepresentation count? If I buy a used car that's representation as having 10K miles but it really has 80K miles because someone rolled the odo and lied about it, that does mean I have legal recourse after the sale. It's not that "a deal is a deal". If one party is lying about what is being sold, that matters.
Same for houses and other things. The law does give one party recourse if the other party lied through their teeth about what they were selling.
Also, even with a 1B discount, Verizo
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Cars & housing are special cases where specific pro-consumer laws protect you from fraud on the part of the seller. Places where "buyer beware" is a bit too open ended and the seller is required to behave honestly.
Corporate mergers are pretty much wild west in terms of negotiating the deal. Both sides are expected to do due diligence in determining the state of the companies being acquired. I'd be shocked if there wasn't some term in the agreement voiding it if the parties intentionally withheld mate
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Courts seem to disagree with that. Plenty of cases where a company has sold it self with misrepresentation and the courts levying against the previous owners. While there's indeed a case for a company doing due diligence, when a company has sat on an egregious problem and misrepresent themselves to a prospective buyer that goes out the window.
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Mashiki, while that is true I don't think that is the case here. Yahoo misrepresented nothing. I am assuming Yahoo did not know about the data breach when they signed the deal.
That being said, most merger agreements have a materiality clause allowing termination of the merger is something significance comes up. It is a bit of a weasel clause and is rarely used but it almost always in the merger agreement. I am not sure I would call this data breach material in the financial sense but it does give Verizon le
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Comment removed (Score:5, Insightful)
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Tim Armstrong? (Score:2)
Re: Tim Armstrong? (Score:1)
Had a nervous breakdown. It seems being an exec calms his nerves. The hectic life of a rockstar was just too much. Sex drugs, and CEO's, alright.
"...no legal recourse to change the terms" (Score:5, Informative)
http://www.nolo.com/legal-ency... [nolo.com]
Excerpt:
Misrepresentation
If fraud or misrepresentation occurred during the negotiation process, any resulting contract will probably be held unenforceable. The idea here is to encourage honest, good faith bargaining and transactions. Misrepresentations commonly occur when a party says something false (telling a potential buyer that a house is termite-free when it is not) or, in some other way, conceals or misrepresents a state of affairs (concealing evidence of structural damage in a house's foundation with paint or a particular placement of furniture).
Nondisclosure
Nondisclosure is essentially misrepresentation through silence -- when someone neglects to disclose an important fact about the deal. Courts look at various issues to decide whether a party had a duty to disclose the information, but courts will also consider whether the other party could or should have easily been able to access the same information. It should be noted that parties have a duty to disclose only material facts. But if Party A specifically asks Party B about a fact (material or non-material), then Party B has a duty to disclose the truth.
A more extensive discussion of the topic:
http://scholarship.law.berkele... [berkeley.edu]
Was just going to say email scanning is material (Score:2)
Yeah, this has a material affect on the company. $1bn USD? Make it $1.5bn.
Unknown damages (Score:2)
So, they're factoring in their potential liability from Yahoo's failure to secure its systems and/or notify its customers of a security breach in a timely fashion at $2 per user? I wonder if they hired the same folks as Bank Of America used when deciding whether or not buying Country Wide Mortgage was a good idea?
Pot and kettle (Score:2)
If I were Yahoo I'd be asking for a billion more in compensation for its name being dragged through the mud of an association with Verizon. Yes, Yahoo has a bad rep, but is Verizon's better? Yahoo strikes me as a guilty schoolboy covering up a crime just to save its ass, whereas Verizon is the kid who tears the wings off flies and loves torturing animals.
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IMHO Yahoo should take the deal before Verizon comes to it's senses and realises what they are buying.
Verizon didn't have any reason to buy yahoo (AFAIK) other than hey look at all this extra money we have what can we spend it on?
Too busy snorting and gasping to let out a laugh (Score:2)
Verizon is going to put AOL and Yahoo back on track? They expect to double the userbase in 4 years?
Every Verizon portal and web service in the history of the company has sucked. The best they ever managed was being ugly and obsolete on release.
And who can forget the god-awful software on their cable boxes? It took them years to get consistent HDMI output to brand name AV equipment. How the hell Do you deploy a box that can't work with Samsung TVs or Pioneer receivers (among others)?
Marissa Mayer loses $1B in Yahoo value (Score:2)
She's been terrible for the Yahoo brand. Overcompensated and underperforming.
And now a gender bias lawsuit against Yahoo and Ma (Score:2)
Sold! (Score:1)
They better sell it fast before the next scandal surfaces...
Cynical. (Score:1)
...because who wants to bet Verizon is/has been doing it too?
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That's what I was thinking. Verizon's just annoyed Yahoo has spoiled the plans they already had in place for after they completed the purchase.
No legal recourse? (Score:1)