Yahoo Sees Verizon Deal Taking Longer Than Expected -- Update
January 23 2017 - 5:05PM
Dow Jones News
By Deepa Seetharaman
Yahoo Inc., subject of two huge data breaches that have cast a
shadow over its deal with Verizon Communications Inc., pushed back
its expected closing date for the transaction, citing "work
required to meet closing conditions."
Verizon's $4.8 billion deal to buy Yahoo's main business had
been expected to close in the first three months of 2017. But the
deal has come into question after the disclosure of two massive
hacks since the transaction was announced.
On Monday, Yahoo said it is "working expeditiously to close the
transaction as soon as practicable" in the second quarter and said
it has been continuing to work with Verizon on integration
planning.
After the sale of its core internet business, the remaining
company will be called Altaba Inc., which will contain Yahoo's
stake in Alibaba Group Holding Ltd. and Yahoo Japan.
In September, Yahoo disclosed the 2014 theft of personal data of
more than 500 million user accounts. The stolen data included
names, email addresses, dates of birth, telephone numbers and
encrypted passwords, Yahoo said. In October, Yahoo shared a chart
that showed usage of its email product rose slightly after the
first breach was reported.
Then in mid-December, Yahoo said it was hit with a different
massive data breach in 2013 that compromised private information of
more than 1 billion user accounts.
The second hack, separate from the 2014 breach disclosed in
September, amplified concerns among investors that the deal was at
risk of falling apart. Before Yahoo disclosed its second, larger
hack, Verizon was close to an agreement with Yahoo on how to
handling future hacking liabilities, The Wall Street Journal
previously reported. The second hack put things on hold.
Also unclear is the potential effect of U.S. authorities'
investigation, reported Sunday by The Journal, into whether the two
breaches should have been disclosed sooner.
Separately, Yahoo reported fourth-quarter earnings of $162
million, or 17 cents a share. A year earlier, the company had
booked a huge loss because of a $4.46 billion goodwill impairment
charge.
On an adjusted basis factoring out certain items, per-share
earnings were 25 cents, up from 13 cents a share in the fourth
quarter of 2015. Analysts, on average, had expected 21 cents per
share, according to Thomson Reuters.
Yahoo generated $1.47 billion in revenue, up from $1.27 billion
the previous year. The company was projected to report $1.38
billion in revenue. Fourth-quarter revenue excluding commissions
paid to partners for web traffic fell 4.2% to $960.1 million,
marking the eighth decline in the past nine periods for the key
metric.
As it did the previous quarter, Yahoo said it would be skipping
its earnings conference call "due to the pending transaction" with
Verizon.
Shares of the company rose 0.8% to $42.70 in after-hours
trading.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
January 23, 2017 16:50 ET (21:50 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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