For a mobile carrier, a data breach is a huge problem. Data breaches in the realm of carriers can compromise customer, network, and executive data, leading to an undermining of the oh-so-vital trust that consumers have in the company, along with formal investigations by entities who may be a bit higher up the food chain, like governing bodies. Obviously, this would apply to any entity that a carrier has ties with, including asset companies. That’s why Verizon had a few choice words about a very large-scale data breach that Yahoo recently found out about and owned up to.
When Yahoo finally broke the silence on the massive hack, they not only told consumers what had happened and what the consequences may be, but also what steps the company is taking to prevent something like that from happening again. Since the hack happened back in 2014 and was only recently discovered, however, many feel that Yahoo’s response was neither prompt nor up to par. While Verizon’s general counsel, Craig Silliman, did not say as much, Big Red’s harsh response made it clear that the whole thing left a bad taste in their mouths. An investigation by the FBI revealed that the hack was most likely the work of the Russian government, but Verizon paid that detail no mind in saying that the hack seemed to be a “material” occurrence, and may well affect their tentative purchase of Yahoo’s core assets.
In today’s political climate, a US company being hacked by Russian government officials is certainly a big deal; how big a deal depends on who you ask. Verizon, however, takes the stance that, from their perspective and involvement angle, the perpetrator’s identity is practically irrelevant. The fact that there was a hack at all and that it was on such a huge scale was what made it “material”, which means that it may have an adverse affect on the value proposition of the asset that they’re looking at obtaining. Since Verizon has already asked for a $1 billion discount in the Yahoo deal, Verizon’s reaction to the data breach fiasco does not bode well for the future of the buyout, which could leave the struggling internet dinosaur in a tight spot. Silliman did not outright say what effect the news may have on the deal.