Verizon is close to a new deal with Yahoo that could see the telecom giant purchasing the beleaguered Internet company for a slight discount of $250 million, according to Bloomberg News.
If true, that amounts to a price cut of roughly 5 percent. Analysts have predicted for months that Verizon could seek to renegotiate for a lower price – or walk away from Yahoo altogether – amid revelations of massive security breaches at Yahoo last year.
"This is the kind of move I expected from Verizon," said Jeff Kagan, an independent telecom and Internet industry analyst. But, he added, "I am surprised the deal was only cut by $250 million. I expected more."
Proposed last year, the original acquisition had Verizon buying Yahoo for $4.8 billion in an effort to diversify Verizon’s business. The wireless and broadband service provider hopes to sell advertising against Yahoo’s numerous websites, as well as to gather up the behavioral data generated by users of the company’s services. With fantasy sports leagues, Tumblr and a major news portal, Yahoo still ranks among the top-visited destinations on the Web after Google and Facebook.
But Verizon’s plans for Yahoo ran aground after Yahoo disclosed a string of data breaches that analysts say are among history’s largest. Amid multiple warning flags raised by Verizon and a probe by federal regulators over whether Yahoo adequately informed shareholders of the risk, Yahoo’s future seemed uncertain in recent weeks. Some analysts warned that even if Verizon moved ahead with the deal, it would still face the possibility of discovering further lapses in Yahoo’s security for years to come.
Still, Yahoo recently said it expected the deal with Verizon to close in the second quarter. The company’s stock jumped nearly 3 percent on the news.
Verizon declined to comment. Yahoo didn’t immediately responded to a request for comment.
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