Dive Brief:
- Verizon Communications Inc. and Yahoo Inc. officially amended the terms of their agreement for the purchase of Yahoo’s operating business, according to a Verizon announcement.
- Verizon will pay $350 million less than originally agreed to last summer, and the companies agreed to share "certain legal and regulatory liabilities arising from certain data breaches incurred by Yahoo."
- However, under the revised agreement, liabilities arising from shareholder lawsuits and SEC investigations will be the sole responsibility of Yahoo, according to the announcement. But Yahoo will only be responsible for 50% of cash liabilities for non- government and third-party litigation related to the breaches.
Dive Insight:
The U.S. Securities and Exchange Commission (SEC) issued a filing last month indicating it plans to investigate whether Yahoo could have disclosed its two enormous data breaches sooner. The SEC requires companies to disclose cybersecurity risks immediately if they impact investors. Under the amended terms, Yahoo will be on its own to pay any fines that arise from that investigation.
The change brings the purchase price down to about $4.48 billion, which still seems generous given all of Yahoo’s troubles. The key here is access. Yahoo has a "global audience" of more than one billion people, and that’s what Verizon is after.
The combination of Yahoo, Verizon and AOL, purchased by Verizon in 2015, creates a vast portfolio of brands "with extensive technology-powered distribution capabilities," according to the press release.
Verizon has been working to grow its digital media business, and the Yahoo audience can go a long way in getting it there, despite Yahoo’s tarnished reputation.
