Yahoo revealed on Monday, 23 January, that the closing of the $4.8 billion deal to sell its core internet assets to US telecom giant Verizon has been delayed several months. What’s more, the US Securities and Exchange Commission have opened an investigation into whether Yahoo should have informed investors sooner about its two major data breaches announced last year.
The US Securities and Exchange Commission is said to have requested documents from Yahoo in December 2016 concerning the two data breaches the company disclosed last year. According to US law, all companies that experience such hacks must disclose them as soon as they are deemed to affect stock prices – which Yahoo did not.
The company announced in September last year that hackers in 2014 had stolen data from more than 500 million of its users’ accounts. The company then announced in December another breach dating back to 2013, in which over a billion users had their data stolen.
The focus of the SEC’s investigation into Yahoo is to determine why it took Yahoo several years to reveal the 2013 and 2014 hacks, the Wall Street Journal reported. However, the SEC has not yet decided whether it will file a lawsuit against the company. The data breaches have been a huge embarrassment for Yahoo as it plans to sell its core internet business to Verizon – a deal that Yahoo recently announced is delayed.
The deal, which was originally set to close this quarter, has been pushed into the next quarter, AFP reported. The announcement came as Yahoo released its quarterly earnings figures that showed a profit of $162 million in the final three months of 2016. The company said in a release, “Yahoo has continued to work with Verizon on integration planning for the sale of its core business.”
Following the disclosure of the data breaches, Yahoo’s deal with Verizon is now in doubt – a deal which would end the company’s more than twenty years as an independent company. Yahoo insists that it is ramping up security to ensure that data breaches will not be an issue again. Yahoo CEO Marissa Meyer said, “Our top priority continues to be enhancing security for our users.”
Meyer added that “approximately 90 percent 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.”