Yahoo has pushed back the sale of its Internet division to Verizon to the second quarter of 2017, delaying the $4.83-billion all cash deal for several months.
Although the transaction was originally to be completed in the first quarter of this year, Yahoo, as part of its latest quarterly earnings report, said due to the “work required to meet closing conditions” the timeline had to be altered. Yahoo, in a statement, went on to say that it is “working expeditiously to close the transaction as soon as practicable” in the second quarter, adding that it has “continued to work with Verizon on integration planning for the sale of its core business.”
News of the delayed deal comes just days after it was revealed that the U.S. Securities and Exchange Commission is investigating Yahoo for its failure to promptly report the 2013 and 2014 hacks of its systems to its investors. Yahoo did not disclose the 2014 breach of 500 million user accounts until last September and then, in December, Yahoo admitted to yet another hack, this one in 2013, affecting one billion accounts.
Those hacks not only prompted the investigation, but also caused Verizon to put the brakes on its deal with Yahoo. Verizon, at one point, was said to be pushing for a $1-billion discount off the purchase price and some Verizon officials have said publicly the deal may not go through at all.
Yahoo CEO Marissa Mayer, however, seems to be optimistic.
“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,” Mayer, said. “In addition to integration planning, our top priority continues to be enhancing security for our users. With security protocols and password changes in place, 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. Our commitment to our users is unwavering, and we continue to be encouraged by their loyalty to us and their ongoing patronage of our products.”
Mayer described its fourth quarter results, with revenue of $1.47 billion, up from $1.27 billion a year earlier, as “impressive.” Net earnings skyrocketed to $162 million from the $4.4 million in the year-ago quarter.
“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,” Mayer added. “What we have achieved reflects some of the most impressive teamwork, focus, and resilience I’ve seen throughout my career. We continued to build our mobile and native businesses — delivering nearly $1.5 billion in mobile revenue and over $750 million in native revenue — while operating the company at the lowest cost structure in a decade.”
Yahoo recorded revenue of $5.17 million for the entire year with net earnings of $214 million.