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Pact 'absolutely' makes sense, but internet firm's data breach must be probed, carrier says

By Deepa Seetharaman 

LAGUNA BEACH, Calif. -- Verizon Communications Inc. thinks its planned acquisition of Yahoo Inc. "absolutely" still makes sense, but the carrier still needs a lot of information about the major customer-data breach at the internet company that surfaced shortly after the agreement, Verizon Executive Vice President Marni Walden said Wednesday.

Verizon hopes to get the results of Yahoo's review of the hacking issue within 60 days, Ms. Walden said here at The Wall Street Journal's WSJDLive 2016 technology conference. She declined to say if there is a scenario in which Verizon might walk away from its $4.8 billion deal to buy Yahoo, announced in July.

"What we have to be careful about is what we don't know," Ms. Walden said. "We're not going to jump off a cliff blindly so we need to have more information before we can determine, but strategically the deal still makes a lot of sense to us."

Yahoo announced on Sept. 22 that user data from 500 million accounts were stolen in a 2014 breach that the company says it discovered after the deal was announced.

Verizon is "working closely" with the Yahoo, which is investigating the hack, and Verizon still needs a lot of information, Ms. Walden said. "We're hoping in the next 60 days or less that we can have an outcome."

The Yahoo deal is part of Verizon's efforts to create a digital advertising player that can serve as a meaningful rival to Facebook Inc. and Alphabet Inc.'s Google. Combining AOL and Yahoo would allow Verizon to "assemble a relevant third player," Ms. Walden said. "Putting them together gives us a better chance in the marketplace."

After the Yahoo deal, Verizon will have spent roughly $10 billion to flesh out its content strategy, including its $4.4 billion AOL deal last year. Verizon calls the combination of AOL and Yahoo "Media Co" -- Ms. Walden said she was open to suggestions for better names -- each of which has media properties that draw a lot of eyeballs. Ms. Walden said Verizon plans to maintain the Yahoo brands.

Verizon's content strategy is mobile-first, focused on creating short episodes of less than 10 minutes. She contrasted that with the approach of AT&T Inc., which last week reached an $85.4 billion deal to buy Time Warner Inc., home of HBO, CNN, and the Warner Bros. film and TV studio.

"They are going after a market that exists today -- and we're going after where we think the market is headed," she said.

"We are working to create content that is meaningful to that audience that's millennial or younger," she added. "Right now we're not going out to make 'Game of Thrones,'" the HBO show, she said.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com

(END) Dow Jones Newswires

October 27, 2016 02:48 ET (06:48 GMT)

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