Yahoo sale to Verizon faces delay amid data breach investigation

Yahoo sale to Verizon faces delay amid data breach investigation

Yahoo's $4.8bn (£3.8bn) deal to offload its core business to Verizon is now not expected to be completed until the second quarter of 2017, the company said, as it announced fourth quarter results.

The revelation came after it emerged the business is being investigated by the US Securities and Exchange Commission over the two huge data breaches it revealed in September and December last year.

The SEC will consider whether Yahoo should have disclosed the breaches to investors sooner, The Telegraph reports.

The sale of Yahoo’s main internet business to Verizon, which will see it closely integrated with AOL, was agreed last July. After years in which Yahoo has struggled to turn its performance around, investors had described the assets as being worthless.

The sale did not include Yahoo’s stake in Chinese e-commerce giant Alibaba, or its one-third share of Yahoo Japan. Those will remain in the existing company, which will become an investment vehicle and be renamed Altaba.

Yahoo suffered the embarrassment last year of breaking the record for the largest data breach in history for the second time. In September, it revealed that more than 500 million user accounts had been compromised in 2014. Three months later, it emerged that a separate attack, the year before, had hit more than a billion users.

Verizon has not indicated that the data breaches could threaten the deal, but has made clear that they complicate the sale process. In December it said it would "evaluate the situation as Yahoo continues its investigation," and would "review the impact of this new development before reaching any final conclusions."

In better news for the company, Yahoo’s revenues grew 15.7% year-on-year in the last three months of 2016, to $1.47bn.

Yahoo chief executive Marissa Mayer, who is expected to leave Altaba and move to Verizon after the sale completes, said: "I'm very pleased with our Q4 results and incredibly proud of the team's execution on our 2016 strategic plan, particularly given the uniquely eventful past year for Yahoo.

"We continued to build our mobile and native businesses – delivering nearly $1.5bn in mobile revenue and over $750m in native revenue – while operating the company at the lowest cost structure in a decade. With our 2016 and Q4 financial results ahead of plan, and the continued stability in our user engagement trends, the opportunities ahead with Verizon look bright."

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