Because of security issues that compromised the personal information of its users, Yahoo lost $350 million in their sale to Verizon. The revised deal requires Yahoo to pay 50% of any cash liabilities incurred from government investigations and lawsuits. Here’s Verizon’s view on the amendment to the $4.8 billion acquisition:
The amended terms of the agreement provide a fair and favorable outcome for shareholders. It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.
-Marni Walden, Verizon executive vice president and president of product innovation and new businesses
Verizon is interested in Yahoo’s digital advertising market. Yahoo has 1 billion users and despite the security breaches, the majority of yahoo users still use their services. Verizon offered unlimited data plans this month to their wireless customers to compete with other wireless providers. This will keep more customers in Verizon’s network, which will increase their digital advertising revenue on smartphones. In 2015, Verizon purchased AOL for $4.4 billion for its advertising technology.
Verizon sees room in the digital advertising market, despite the dominance of Google and Facebook. Yahoo has several sections on their website that are popular including sports, entertainment, and finance.
Source: LA Times