(Reuters) - Verizon Communications Inc (VZ.N) said on Tuesday it would buy Yahoo Inc’s YHOO.O core business for $4.48 billion, lowering its original offer by $350 million in the wake of two massive cyber attacks at the internet company.

The closing of the deal, which was first announced in July, had been delayed as the companies assessed the fallout from two data breaches that Yahoo disclosed last year. The No. 1 U.S. wireless carrier had been trying to persuade Yahoo to amend the terms of the agreement following the attacks.

Verizon and Yahoo signed the deal on Sunday evening after weeks of talks that included calls with Yahoo CEO Marissa Mayer and a meeting between Verizon CEO Lowell McAdam and Yahoo director Tom McInerney in New York earlier this month to agree on the amount of the price reduction, a person involved in the talks said.

The two sides had an agreement in principle about a week earlier that included a liability sharing agreement, something that Verizon decided early on that it needed to reach a deal.

Verizon conducted brand studies and found that Yahoo’s reputation was holding up after the hacks, the person said. The company decided to proceed in part because it continued to believe that the deal made strategic sense and that users were loyal and engaged.

The companies said on Tuesday they expect the deal to close in the second quarter. The data breach may delay some integration of Yahoo with Verizon after the closing, the person said.

The deal brings to Verizon Yahoo’s more than 1 billion users and a wealth of data it can use to offer more targeted advertising. Verizon will combine Yahoo’s advertising technology tools as well as its search, email and messenger assets with its AOL unit, purchased for $4.4 billion in 2015.

Verizon’s shares rose 0.3 percent to $49.33 in afternoon trading, while Yahoo’s shares were up 0.8 percent at $45.48.

Under the amended terms, Yahoo and Verizon will split cash liabilities related to some government investigations and third-party litigation related to the breaches.

FILE PHOTO: The Verizon logo is seen on one of their retail stores in San Diego, California, U.S. April 21, 2016. REUTERS/Mike Blake/File Photo

Yahoo, however, will continue to be responsible for liabilities from shareholder lawsuits and SEC investigations.

Yahoo said in December that data from more than 1 billion user accounts was compromised in August 2013, making it the largest breach in history.

This followed the company’s disclosure in September that at least 500 million accounts were affected in another breach in 2014.</s>REUTERS - Verizon Communications Inc, the No. 1 U.S. wireless carrier, said on Tuesday it agreed to buy the core internet business of Yahoo Inc for US$4.48 billion, reflecting a US$350 million cut to the original price.

The deal, which is expected to close in the second quarter, will combine Yahoo's search, email and messenger assets as well as advertising technology tools with its AOL unit.

Verizon had been trying to persuade Yahoo to amend the terms of the agreement to reflect the economic damage from two cyber attacks.

Under the amended terms, Yahoo and Verizon will split any future liabilities and costs that arise from the data breaches.</s>NEW YORK, NY and SUNNYVALE, Calif. -- Verizon Communications Inc. (NYSE, Nasdaq: VZ) and Yahoo! Inc. (Nasdaq: YHOO) today announced that they have amended the existing terms of their agreement for the purchase of Yahoos operating business.

Under the amended terms, Verizon and Yahoo have agreed to reduce the price Verizon will pay to acquire Yahoos operating business by $350 million. In addition, Verizon and Yahoo will share certain legal and regulatory liabilities arising from certain data breaches incurred by Yahoo.

Marni Walden, Verizon executive vice president and president of Product Innovation and New Businesses, said: We have always believed this acquisition makes strategic sense. We look forward to moving ahead expeditiously so that we can quickly welcome Yahoos tremendous talent and assets into our expanding portfolio in the digital advertising space.

Walden added, 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.

Marissa Mayer, CEO of Yahoo, said: We continue to be very excited to join forces with Verizon and AOL. This transaction will accelerate Yahoo's operating business especially on mobile, while effectively separating our Asian asset equity stakes. It is an important step to unlock shareholder value for Yahoo, and we can now move forward with confidence and certainty. We have a terrific, loyal, experienced team at Yahoo. I'm incredibly proud of our teams strong product and financial execution in 2016, setting the stage for a successful integration.

Under the amended terms, Yahoo will be responsible for 50 percent of any cash liabilities incurred following the closing related to non-SEC (Securities and Exchange Commission) government investigations and third-party litigation related to the breaches. Liabilities arising from shareholder lawsuits and SEC investigations will continue to be the responsibility of Yahoo.

Also under the amended terms, the data breaches or losses arising from them will not be taken into account in determining whether a Business Material Adverse Effect has occurred or whether certain closing conditions have been satisfied.

Verizons acquisition of Yahoo  now valued at approximately $4.48 billion in cash, subject to closing adjustments  is expected to close in second-quarter 2017.

On July 23, 2016, Verizon and Yahoo entered into a definitive stock purchase agreement under which Verizon would acquire Yahoos operating business and global audience of more than 1 billion users, including more than 600 million mobile users.</s>Yahoo will also share in some potential liabilities related to two massive data breaches

Verizon Communications will pay US$350 million less for Yahoo after two major data breaches reported by the struggling internet pioneer.

Verizon will pay about $4.48 billion for Yahoo's operating business, and the two companies will share any potential legal and regulatory liabilities arising from two major data breaches announced in late 2016. The companies announced the amended terms of the deal Tuesday.

Back in October, one news report had Verizon seeking a $1 billion discount after the first breach was announced.

The new terms "provide a fair and favorable outcome for shareholders," Marni Walden, Verizon's executive vice president and president of Product Innovation and New Businesses, said in a press release.

The deal still makes sense, however, Walden added. The deal brings "Yahoo's tremendous talent and assets into our expanding portfolio in the digital advertising space," she said.

Yahoo continues to deal with the fallout from the two breaches, one affecting 500 million user accounts and the second affecting 1 billion. Just last week, Yahoo sent out warning letters to users saying their accounts may have been compromised through a forged cookie scheme apparently related to the 500 million account breach announced last September.

Verizon first announced plans to buy most of Yahoo's assets for $4.8 billion last July. Under the new terms, Yahoo will be responsible for half of any liabilities related to the breach from third-party lawsuits and from government investigations, outside of the U.S. Securities and Exchange Commission. Those potential liabilities were not addressed in the original acquisition announcement, which happened before the breaches were reported.

Liabilities arising from shareholder lawsuits and SEC investigations will continue to be Yahoo's responsibility.

The companies expect the deal to close in the second quarter.</s>The revised sale reflects the diminished value of Yahoo's core business in the wake of two massive security breaches.

Verizon Communications will pay $350 million less than originally planned for Yahoo’s core business amid concerns that two massive security breaches had lowered the value of Yahoo’s email and other digital services.

The revised merger agreement announced by the two companies Tuesday brings the price of the deal down to $4.48 billion. The closing of the transaction had been delayed as Verizon and Yahoo assessed the fallout from the data breaches, which Yahoo disclosed last year.

The two have also agreed to share some legal and regulatory liabilities arising from the hacks.

“The amended terms of the agreement provide a fair and favorable outcome for shareholders,” Marni Walden, Verizon’s executive vice president and president of new business, said in a news release. “It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.”

As The Associated Press reports, some investors had been concerned that Verizon would demand a discount of at least $1 billion or cancel the deal entirely. “Avoiding an even larger reduction in the deal value represents a small victory for Yahoo Chief Executive Marissa Mayer,” the AP said.

The lower sale price will cost Yahoo shareholders roughly 37 cents per share. “In the end, [Verizon] decided that the long-term benefits of picking up the Yahoo business, diminished as it has been over the years, would be more beneficial than dropping it altogether,” TechCrunch reported.

The potential benefits for Verizon include increasing sales of advertising and other services over its network as its legacy business of providing basic phone services faces stagnation and declining sales.

“Although Verizon today is a $126 billion business (2016 revenues), it has only 114.2 million retail connections,” TechCrunch said, noting that it is picking up Yahoo’s more than 1 billion users, and digital content, for “a relatively small fee.”

What’s left of Yahoo after the deal — a holding company to be called Altaba — will be solely responsible for liabilities stemming from shareholder lawsuits and a Securities and Exchange Commission investigation of Yahoo, with liabilities from other litigation and government investigations to be split 50/50 with Verizon.</s>​Yahoo is taking a $350 million US hit on its previously announced $4.8 billion US sale to Verizon in a concession for security lapses that exposed personal information stored in more than 1 billion Yahoo user accounts.

The revised agreement, announced Tuesday, eases investor worries that Verizon Communications Inc. would demand a discount of at least $1 billion US or cancel the deal entirely.

The hacking bombshells, disclosed after the two companies agreed on a sale, represent the two biggest security breaches in internet history.
• Yahoo to change name to Altaba, CEO to leave board in Verizon takeover
• 'It's shocking:' Yahoo hack hits 1 billion accounts, the biggest known security breach in history

The breaches raised concerns that people might decrease their use of Yahoo email and other digital services that Verizon is buying. A smaller audience makes Yahoo's services less valuable because it reduces the opportunities to show ads — the main reason that Verizon struck the deal seven months ago.

Yahoo has maintained that its users have remained loyal, despite any mistrust that might have been caused by its lax security and the lengthy delay in discovering and disclosing the hacks. The separate attacks occurred in 2013 and 2014; Yahoo disclosed them this past September and December.

The lower sales price will cost Yahoo shareholders roughly 37 cents per share. But they may also be responsible for substantial legal costs.

What's left of Yahoo after the deal closes — an entity that will be called Altaba Inc. and have stakes in Chinese e-commerce giant Alibaba Group and Yahoo Japan — will be responsible for liabilities stemming from shareholder lawsuits and from the Securities and Exchange Commission probe of Yahoo. Verizon and Altaba will split costs from all other hack-related lawsuits and government investigations.

This agreement "provides protections for both sides" and should help the deal close by the end of June, Marni Walden, Verizon's head of product innovation and new businesses, said in a statement. Yahoo shareholders have to approve it.

Avoiding an even larger reduction in the deal value represents a small victory for Yahoo CEO Marissa Mayer, who had already been under fire on Wall Street for her inability to turn around the company and then for the humiliating security lapses that came under her watch.
• Yahoo took 18 months to launch probe after breach detected

Verizon's willingness to accept some of the lingering risks from Yahoo's security breaches underscores the wireless carrier's desire to become a bigger player in the digital advertising market. Google and Facebook currently dominate, but Verizon believes there's room to grow.

Because most people already have smartphones, wireless carriers such as Verizon have turned to price cuts and promotions to lure customers from each other. Under pressure, Verizon even restored unlimited data plans this month, robbing it of revenue from monster-size data plans.

Instead, Verizon is trying to make money off the hours people spend gazing at their phones. It bought AOL for $4.4 billion US in 2015 for its advertising technology. Verizon now wants to bolster that with Yahoo's technology, as well as its many users and popular websites devoted to sports, finance, entertainment and news.

Yahoo shares rose 14 cents to $45.24 US in morning trading Tuesday; Verizon stock added 22 cents to $49.41 US.</s>Verizon Communications (VZ) is slicing $350 million off its acquisition offer for Yahoo (YHOO) after the internet company revealed a series of data breaches affecting more than a billion customers.

The deal is now worth $4.48 billion, down from the $4.83 billion Verizon first proposed last summer. The buyout includes Yahoo’s core Internet businesses — news, sports, entertainment, finance and email — but excludes the company’s stake in Chinese e-commerce giant Alibaba (BABA) and certain company patents.

The deal is expected to close in the second quarter of 2017, Verizon said in a news release.

Notably, the revised transaction terms call for Yahoo and Verizon to share equally any future legal costs resulting from the data breaches. Yahoo will be solely responsible for liabilities stemming from shareholder lawsuits and any investigations by securities regulators.

Yahoo disclosed in January that the U.S. Securities and Exchange Commission is looking into the data breaches. It also said the Federal Trade Commission, along other federal and state officials, were investigating.

“We have always believed this acquisition makes strategic sense,” Marni Walden, Verizon’s president of product innovation and new businesses, said in a statement announcing the new deal. “We look forward to moving ahead expeditiously so that we can quickly welcome Yahoo’s tremendous talent and assets into our expanding portfolio in the digital advertising space.”

Yahoo CEO Marissa Mayer called the move “an important step to unlock shareholder value for Yahoo” and said it would “accelerate Yahoo’s operating business especially on mobile.”

The security breaches, which took place in 2013 and 2014, raised concerns that Yahoo users might decrease their usage of the company’s email and other digital services that Verizon is buying. A smaller audience would make Yahoo less valuable because fewer people would see ads — the main reason that Verizon struck the deal seven months ago.

Yahoo has maintained that its users have remained loyal, despite any mistrust that might have been caused by the hacks and the lengthy delay in discovering and disclosing the attacks. Yahoo disclosed the hacks in September and December, three years after the first breach occurred.

Verizon’s willingness to accept some of the lingering risks from the breaches underscores the wireless carrier’s desire to become a bigger player in the digital advertising market, which is dominated by Google parent company Alphabet (GOOGL) and Facebook (FB).

Because most people already have smartphones, wireless carriers such as Verizon have turned to price cuts and promotions to lure customers. Under pressure, Verizon even recently restored unlimited data plans this month, robbing it of revenue from monster-size data plans.

Instead, Verizon is trying to make money off the hours people spend gazing at their phones. It bought AOL for $4.4 billion in 2015 for its advertising technology. Verizon now wants to bolster that with Yahoo’s technology, as well as its more than 1 billion users and popular websites.

The Associated Press contributed to this report.</s>Feb 21 (Reuters) - Verizon Communications Inc, the No. 1 U.S. wireless carrier, said on Tuesday it agreed to buy the core internet business of Yahoo Inc for $4.48 billion, about $350 million less than the original price.

The deal will combine Yahoo's search, email and messenger assets as well as advertising technology tools with Verizon's AOL unit.

Verizon had been trying to persuade Yahoo to amend the terms of the agreement to reflect the economic damage from two cyber attacks.

The closing of the deal, which was first announced in July, has been delayed as the companies assessed the financial fallout from the breaches that Yahoo disclosed last year.

The companies said on Tuesday they expect the deal to close in the second quarter.

Under the amended terms, Yahoo and Verizon will split cash liabilities related to some government investigations and third-party litigation related to the breaches.

Yahoo will continue to be responsible for liabilities from shareholder lawsuits and Securities and Exchange Commission investigations.

Verizon has been looking to mobile video and advertising for new sources of revenue outside the oversaturated wireless market. (Reporting by Aishwarya Venugopal and Anya George Tharakan in Bengaluru; Editing by Saumyadeb Chakrabarty)</s>Yahoo is taking a $US350 million ($NZ488 million) hit on its previously announced $4.8 billion ($NZ6.7 billion) sale to Verizon in a concession for security lapses that exposed personal information stored in more than 1 billion Yahoo user accounts.

The revised agreement, announced overnight, eases investor worries that Verizon Communications Inc. would demand a discount of at least $1 billion ($NZ1.4 billon) or cancel the deal entirely.

The breaches raised concerns that people might decrease their use of Yahoo email and other digital services that Verizon is buying.

A smaller audience makes Yahoo's services less valuable because it reduces the opportunities to show ads — the main reason that Verizon struck the deal seven months ago.

Yahoo has maintained that its users have remained loyal, despite any mistrust that might have been caused by its lax security and the lengthy delay in discovering and disclosing the hacks. The separate attacks occurred in 2013 and 2014; Yahoo disclosed them this past September and December.

The lower sales price will cost Yahoo shareholders roughly 37 cents per share. But they may also be responsible for substantial legal costs.

What's left of Yahoo after the deal closes — an entity that will be called Altaba Inc. and have stakes in Chinese e-commerce giant Alibaba Group and Yahoo Japan — will be responsible for liabilities stemming from shareholder lawsuits and from the Securities and Exchange Commission probe of Yahoo.

This agreement "provides protections for both sides" and should help the deal close by the end of June, Marni Walden, Verizon's head of product innovation and new businesses, said in a statement. Yahoo shareholders have to approve it.

Avoiding an even larger reduction in the deal value represents a small victory for Yahoo CEO Marissa Mayer, who had already been under fire on Wall Street for her inability to turn around the company and then for the humiliating security lapses that came under her watch.

Verizon's willingness to accept some of the lingering risks from Yahoo's security breaches underscores the wireless carrier's desire to become a bigger player in the digital advertising market. Google and Facebook currently dominate, but Verizon believes there's room to grow.

Because most people already have smartphones, wireless carriers such as Verizon have turned to price cuts and promotions to lure customers from each other. Under pressure, Verizon even restored unlimited data plans this month, robbing it of revenue from monster-size data plans.

Instead, Verizon is trying to make money off the hours people spend gazing at their phones. It bought AOL for $4.4 billion ($NZ 6.1 billion) in 2015 for its advertising technology. Verizon now wants to bolster that with Yahoo's technology, as well as its many users and popular websites devoted to sports, finance, entertainment and news.</s>“The closing of the deal, which was first announced in July, had been delayed as the companies assessed the fallout from two data breaches that Yahoo disclosed last year,” Reuters reports. “The deal brings to Verizon Yahoo’s more than 1 billion users and a wealth of data it can use to offer more targeted advertising. Verizon will combine Yahoo’s advertising technology tools as well as its search, email and messenger assets with its AOL unit, purchased for $4.4 billion in 2015.”

“The combined Yahoo and AOL businesses will help diversify Verizon away from its core wireless business, wrote Jennifer Fritzsche, an analyst at Wells Fargo, but ‘we would note its digital media and advertising business would still be a small percentage of revenues,'” Reuters reports. “Verizon and Yahoo said they expect the deal to close in the second quarter.”

Read more in the full article here.
Verizon Communications agrees to buy the core business at Yahoo Inc. for $4.48 billion. Completion of this July 2016 deal had been delayed because of two data breaches Yahoo disclosed last year.