Report: Verizon wants $1B Yahoo discount

Dive Brief:

Verizon is looking for a $1 billion discount from its planned $4.83 billion acquisition of Yahoo, sources told the New York Post.
In September, Yahoo revealed at least 500 million user accounts were compromised in a 2014 data breach the company blamed on "state-sponsored actors." Then earlier this week, reports surfaced that Yahoo secretly scanned customers' emails at the request of the National Security Agency or the FBI, a move unprecedented in its scope.
As a result, AOL CEO Tim Armstrong is "getting cold feet," the Post reported. Armstrong, who was tasked with leading the Yahoo integration into Verizon, is "upset about about the lack of disclosure" and is looking for a price cut or an end to the deal.

Dive Insight:

Thus far, The Yahoo breach has served as a lesson for companies about how not to respond ot a breach. Slow to disclose and offering few details on the attack, Yahoo has been in hot water for weeks as more information has surfaced about the mega breach. Now, with reports of programs to spy on customers, some are wondering what was happening behind closed doors at the ailing internet giant.

Already Yahoo is facing multiple lawsuits stemming from the hack over a "reckless disregard for the security of its users' personal information that it promised to protect." Both consumers and politicians have rushed to criticize how the company handled the breach, particularly as it came to light that the company was slow to invest in cybersecurity defenses. On top of that, CEO Marissa Mayer reportedly declined to give the company's security team additional resources and was not proactive in moving to defend the network.

In addition to threatening the integrity of the Verizon deal, Yahoo may face punishment from the U.S. Securities and Exchange Commission for failing to properly disclose the breach. The SEC has never enforced its rules for how and when companies must disclose cyberattacks, but the agency could make an example of Yahoo to serve as a warning to others to take cybersecurity seriously.