by Max Metzger | Feb 17, 2017 | Comment Now
Verizon is to pay a discounted price for its acquisition of tech giant Yahoo after the disclosure of two massive breaches last year. The two companies are reportedly closing a deal which would cut the sale price of yahoo by around US$300 million according to a variety of outlets.
The discount appears to come as fallout from the disclosure of two major breaches of Yahoo, believed to be some of the biggest ever recorded, combined by the failure of executives in the company to disclose one of the breaches to customers for over a year. The two companies are also said to be discussing shared liability as a result of those breaches
The deal represents a significant reduction on the original US$4.8 billion (£3.84 billion) price was set in late July 2016 prior to Yahoo publicly disclosing two massive breaches.
Yahoo first disclosed a breach in September 2016, telling the public that the data of 500 million users had been accessed in 2014 by what it believed to be a Russian state sponsored attacker. A former employee later told Reuters that some user data had been intentionally left unencrypted.
In December, Yahoo reported an even bigger breach. The company announced in a blogpost that in 2013, an attacker had accessed the accounts of one billion users, stealing their names, emails, phone numbers, dates of birth and MD5 encrypted passwords. The attacker was believed to be the same as the one who conducted the first breach.
To make matters worse, it was later revealed that Yahoo Executives knew about the first breach but did not tell users, Verizon or investors until 2016.
Verizon's CEO, Lowell Mcadam, was quoted in the Wall Street Journal saying that, given these new details, the forthcoming deal could be renegotiated.
Commentators disagreed over what effect the disclosures might have on the upcoming sale of the search engine. While some said the deal might unravel, others said that commingling Yahoo's one-billion plus users with Verizon's wireless customers was simply too enticing to end the deal.
Both parties have remained tight-lipped and it is not quite clear what effect the breaches had on the sale price of Yahoo! as but hundreds of millions of Yahoo user credentials have already been found for sale on the dark web and some users have announced their intentions to sue the company for failing to safeguard their data.
The US Securities and Exchange commission is also said to be investigating the company for its failure to report the breach earlier and EU privacy regulators have questioned CEO Marissa Mayer. Yahoo eventually delayed the acquisition in January, postponing its estimate for finalising the deal from the original date of March 31st to the second quarter of 2017.
This article originally appeared at scmagazineuk.com
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