It’s not been a good year for Yahoo at all.
First it got sold at a really cheap price. This is true when you consider that the internet company used to be worth $128b but eventually agreed to be sold for $4.8b telecom giant Verizon. But even this is now in jeopardy following revelations last week that Yahoo built a software to help government agencies spy on its email service users. They have since said their actions were misunderstood but haven’t offered anything to make us understand. Before that though, they also revealed that about 500 million user accounts may have been compromised in what they term as a state sponsor breach; meaning one of America’s cyber foes like China or Russia could have done this. No formal allegations have been leveled against any government in particular since then.
Juss this week, we gave some possible consequences for those action/decision and one of them was that the Verizon deal with Yahoo could be derailed and eventually be called off but it looks like one of the things predicted may be happening already and that is Yahoo will eventually sell for far less price than the $4.8b Verizon announced.
We have now learned that Verizon wants a $1b discount on the deal. If this happens, it means Yahoo would be sold for $3.8b and that’s not good for the brand. According to the New York Post, AOL CEO Tim Armstrong whose company was acquired by Verizon as was largely responsible for the deal between Verizon and Yahoo in the first place is now pushing for a $1b discount. The report says Mr. Armstrong is unhappy and was thinking of pulling out of the entire deal in the first place. He believes that Yahoo’s value may have diminished in light of the revelations and that their plan to have 2 billion consumers on the AOL/Yahoo platform by 2020 may be hampered. Right now, Yahoo has about 1 billion users of its services.
Verizon was reportedly given just two days’ notice before the public learned of the massive breach that happened in 2014.
It’s not just this though that’s the problem with Yahoo. A second man filed a lawsuit yesterday against Yahoo that hiring favoured women at Yahoo. According to the report in USA Today, Scott Ard, who worked for more than three years at Yahoo until early 2015, says he and others were terminated to “accommodate management’s subjective biases and personal opinions, to the detriment of Yahoo’s male employees,” according to a lawsuit filed in federal court in San Jose, Calif., this week. At a time when we hear of lawsuits of women challenging appointments mainly dominated by men at public and private institutions, this rather says Yahoo CEO Marissa Mayer and other top female executives at Yahoo favour women in their hiring, firing and promotions in the company’s editorial division.
Yahoo spokeswoman Carolyn Clark said they don’t comment of matters that are already in court.
This just increases the liability that Verizon now thinks may not be worth $4.8b in the first place.
Oh Yahoo – let’s just watch and see
Image: CNN Money