Verizon is said to be demanding $1 billion off the $4.8 billion it originally agreed to pay for Yahoo's core assets following recent scandals that have engulfed the Internet company.
The US telco wants to merge the Yahoo Inc. (Nasdaq: YHOO) assets with AOL Inc. (NYSE: AOL), another Internet property it acquired for about $4.4 billion last year, so that it can more effectively compete against the likes of Google (Nasdaq: GOOG) and Facebook in advertising markets.
But just weeks after sealing a deal with Verizon Communications Inc. (NYSE: VZ), Yahoo was revealed to have suffered a massive hack in 2014 that affected as many as 500 million user accounts.
In the last few days, Yahoo is also reported to have colluded with US government authorities on a program that involved snooping on customers' emails.
In light of those developments, Verizon is now reported by the New York Post to be seeking a substantial reduction in the fee it pays for Yahoo's core assets.
The telco is also said to have put aside about $1 billion to fund "possible liabilities" connected with the email hack.
The news comes just a day after the Investor's Business Daily reported that Verizon was closing in on a $3.5 billion sale of data center assets to Equinix. (See Verizon Nearing $3.5B Data Center Sale to Equinix – Report.)
While spending heavily on Internet properties, the operator looks keen on reducing its asset base so that it can focus efforts on service-related activities. It has previously sold parts of its fixed-line business and a number of mobile towers.
— Iain Morris, , News Editor, Light Reading