Last week, Yahoo disclosed that it was the victim of another security breach, which has turned out to be even worse than the first one that the company identified a few months ago.
Yahoo revealed in September that a security breach in late 2014 compromised the information of 500 million users. The new security breach, however, affects over 1 billion users, pushing Yahoo into an even deeper hole on cybersecurity concerns.
Verizon's $4.8 Billion Acquisition Of Yahoo In Jeopardy?
After the confirmation of the first security breach and in combination with the email scanning scandal that Yahoo was involved in, it was reported that Verizon was looking to get a $1 billion discount on its $4.8 billion offer to purchase Yahoo's online operations.
With the discovery of a second and even worse security breach, there have been questions on whether Verizon will still push through with the acquisition. To many, the first security breach would already have been a deal breaker, and coupled with the second one, the uncertainties over Yahoo's assets might be too great.
According to the company, however, it will still pursue the purchase, but it will be looking to amend the terms of the agreement that it had signed with Yahoo. Included in the changes that Verizon will propose are adjustments to the purchase price, taking into consideration the financial impact of the two security breaches.
Verizon threatened that it would go to court if Yahoo does not agree to such changes, signaling doubts that there will be smooth sailing toward the completion of the acquisition. Financial analysts believe that Verizon still wants to buy Yahoo, but there is the possibility that the deal will no longer happen.
If Verizon Backs Out From Buying Yahoo, What Might Come Next?
The goal of Verizon CEO Lowell McAdam in the planned purchase of Yahoo is the creation of an online advertising business that would only be eclipsed in size by Google and Facebook. With the wired and wireless telecommunications businesses of Verizon slowing down, an expansion into new businesses would continue the carrier's growth.
If Verizon would back out from its acquisition of Yahoo, however, there remain limited options in the market for the company to still pursue that goal. Possible acquisition targets include music streaming service Pandora, restaurant reviewer Yelp, and social media platform Twitter, but none of these companies will provide the same amount of advertising revenue that Yahoo offers.
Verizon could also pursue to acquire a major satellite or cable operator, with Comcast, Charter Communications, and Dish Network among the notable targets, though Dish Network is said to be the most likely purchase among the three.
Of course, all this is mere speculation and is hinged on the possibility that Verizon will back out of its plan to buy Yahoo. Verizon has shown tendencies of changing its mind, though, so Yahoo should be willing to give an offer of at least double the $1 billion discount that Verizon was seeking after the first security breach if it still wants the deal to push through.