Verizon still not sure what to do about Yahoo deal
VERIZON SAYS it’s still mulling what to do about its US$4.8 billion Yahoo deal after the Internet company revealed massive hacks of customer information.
The telecoms giant had wanted Yahoo and its huge user base to help it build out a digital-ad arm as the wireless business gets tougher – roughly threequarters of US adults already have a smartphone – but the security breaches have complicated the deal.
While Yahoo said Monday that the sale’s close would likely be delayed by up to three months, until sometime between April and the end of June, Verizon said Tuesday that it is still reviewing what effect the security breaches had on Yahoo’s business.
Verizon could try to walk away from the deal or lower its price if it thinks the hacks made Yahoo’s services less popular.
Recent business trends at Verizon underscore why it wants to invest in digital advertising.
The country’s biggest mobile carrier added fewer new cell phone or tablet customers in the last three months of 2016 than it did in 2015, and wireless service revenue – what cell phone customers pay for their plans – dropped 4.9 per cent.
That metric fell 5.4 per cent for the year, and Verizon said Tuesday that wireless service revenue won’t start growing until 2018.
Wireless revenue overall fell 1.5 per cent in the quarter, to US$23.4 billion.
In its smaller ‘wireline’ business – cable, phone and Internet for businesses and consumers – revenue fell 3.1 per cent to US$7.81 billion.
The New York company’s overall net income fell 17 per cent to US$4.6 billion, or US$1.10 per share, in the last three months of 2016. Stripping out one-time events, earnings came to 86 cents per share, three cents shy of what analysts surveyed by Zacks Investment Research had projected.
Revenue fell 5.6 per cent to US$32.34 billion, topping analysts’ estimate.
Shares of Verizon Communications Inc fell 4.5 per cent to US$50.08 in morning trading.