While Verizon is moving ahead with its plan to take over core parts of Yahoo's business, the company has cut a new deal that lowers the price and has Yahoo shouldering more responsibility for any fallout from several large security breaches.
Expected to close in the second quarter of this year, the Verizon acquisition of Yahoo is now priced at $4.48 billion -- $350 million less than when the purchase was first announced in July. The new terms also assign Yahoo with half the cash liabilities that might result from any investigations or lawsuits connected to the security breaches at Yahoo.
Two major hacks of Yahoo that took place in 2013 and 2014 came to light after Verizon announced its acquisition plans. A more recent cookie forging attack also appears to have affected more Yahoo users than initially believed.
Acquisition 'Makes Strategic Sense'
"We have always believed this acquisition makes strategic sense," Marni Walden, Verizon's executive vice president and president of product innovation and new businesses, said in a statement today. "The amended terms of the agreement provide a fair and favorable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter."
In addition to lowering Yahoo's selling price, the new terms will also hold that company responsible for half of any cash liabilities that might arise after closing from any third-party lawsuits or government investigations outside of the Securities and Exchange Commission (SEC). Yahoo is already on the hook for any fallout from shareholder lawsuits or SEC investigations.
Under the new terms announced today, Verizon will not consider the recently disclosed Yahoo breaches -- or any potential losses stemming from those -- as a "business material adverse effect."
More Accounts Hit by Forged Cookies?
Following Verizon's acquisition announcement last summer, Yahoo disclosed that it had been the target of two major hacks in 2013 and 2014. The attacks affected more than 1 billion Yahoo user accounts.
In an update about those security breaches in December, Yahoo reported that its forensic experts were also investigating an unauthorized third party -- possibly a "state-sponsored actor" -- who used forged cookies to access user accounts without passwords. Last week a number of Yahoo users said that they had recently received warnings about forged cookies, suggesting that attack might also be larger than initially believed.
Once valued at more than $44 billion, Yahoo's revenues dropped precipitously between 2007 and 2011. AOL, another one-time Internet giant that experienced a similar fate, was acquired by Verizon in 2015 for $4.4 billion.
Under the pending acquisition plan, Verizon expects to expand its digital media portfolio with the addition of Yahoo's news, finance and sports properties. It will also acquire 225 million Yahoo email users and advertising technology assets like Brightroll, Flurry and Gemini.
The remaining parts of Yahoo's business, which include shares in Yahoo Japan and the Alibaba Group, will continue operating under the new brand name Altaba.