Yahoo has delayed its $4.8 billion deal to sell its main internet resources to US telecom giant Verizon for several months. Due to the incomplete “work required to meet closing conditions,” the closing has been postponed to the next quarter. The online pioneer of California stated that it was “working expeditiously to close the transaction as soon as practicable.”
According to the latest development, Yahoo hit the mark of $162 million profit in the last quarter of 2016. The deal with Verizon has been delayed for further discussion as it will end Yahoo’s career as an independent company and may cause the exposure of two major data breaches.
Yahoo is now strengthening its security to deal with any classic hacks.
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Securing the Users Data
Marissa Mayer, Chief Executive of Yahoo stated:
“Our top priority continues to be enhancing security for our users”
In addition, she commented:
“Approximately 90 per cent of our daily active users have already taken or do not need to take remedial action to protect their accounts, and we’re aggressively continuing to drive this number up”
In 2016, Yahoo had more than a billion users from which more than 650 million used mobile devices to connect. On Sunday, The Wall Street Journal reported that the US Securities and Exchange Commission (SEC) have started an investigation about the two major data breaches that whether or not Yahoo should have reported them to the investors sooner.
According to the US law, it is obligatory for the companies that become the hackers target to expose them before it affects the stock prices. In September, Yahoo reported that more than 500 million of its user’s accounts were hacked in 2014. It reported another cybercrime in December 2013 that affected more than billion users.
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The main focus of SEC is to investigate that why Yahoo took years to disclose the 2013 and 2014 cyber-attacks. The disappointment and embarrassment triggered by the data breaches caused the leading company to fall behind Google and Facebook.
Cyber-Attacks of 2013 & 2014
Due to the way in handling such events, Verizon may close the deal or deal with much lower price with Yahoo. During the company’s acquisition process, any profit or losses, above or below target don’t actually matter.
An analyst of Enderle Group, Rob Enderle told AFP that:
“The bigger things are the breaches; those have Verizon reconsidering the deal. I think the merger is at risk; the delay would point to that as still a possibility”
According to the earnings report, Yahoo experienced a huge $4.4 billion loss before gaining profit during the similar period last year. This resulted due to the depriving value of its assets. Its revenue grew from $1.27 billion to $1.47 billion in the last quarter of 2016. Moreover, Yahoo experienced a full year revenue loss of $214 million. It rose from $5billion to $5.2 billion in 2015.
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Mayer has been diverting her attention to various advertising offering and revenue at Yahoo which she named ‘Mavens’. As compared to Mavens $1.7 billion revenue in 2015, it slightly grew to $2 billion in 2016. Mayer stated:
“I’m very pleased with our Q4 results and incredibly proud of the team’s execution on our 2016 strategic plan, particularly given the uniquely eventful past year for Yahoo”
Yahoo’s after-market trades went up more than 1% to $42.88 breaking the Wall Streets outlooks. Although Mayer hopes to stay in touch with the core business of Yahoo, she is expected to resign from the company’s board after its acquisition by Verizon.
Through this deal, Yahoo will separate its core business operation from the valuable assets in Chinese internet giant Alibaba. Yahoo will act as an investment company and will be renamed as Altaba, Inc.
Source: Japan Today / image: Bidness Etc
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