Verizon’s deal drama with Yahoo is going to drag on for a long time.
Verizon revealed on Thursday that its legal team held their first call with Yahoo yesterday to determine the financial impact of Yahoo’s massive security breach on the pending acquisition.
“From what I understand, that’s going to be a long process,” Fran Shammo, Verizon’s CFO, said on a conference call with analysts after the company reported its third quarter earnings results. “Until then, we haven’t reached any final conclusions.”
The comments come amid a flurry of reports that Verizon could scrap its $4.8 billion deal to buy Yahoo’s core properties — or at the very least push to renegotiate the price in response to Yahoo’s breach.
Yahoo said last month data “associated with at least 500 million user accounts” was stolen in one of the largest cybersecurity breaches ever.
Questions remain about how much this will undermine Yahoo’s user engagement and when Yahoo first learned of the breach. Verizon itself only learned about the breach two days before Yahoo announced it publicly.
Verizon execs have said they still see value in buying Yahoo, but suspect the breach may have a meaningful financial impact on the deal.
“We are still evaluating what it means for this transaction. This was an extremely large breach that received a lot of attention,” Shammo said on the call. “We have to assume it will have a material impact.”
The lingering caution on Verizon’s side comes in stark opposition to Yahoo’s confident rhetoric this week.
“We are busy preparing for our integration with Verizon. We remain very confident, not only in the value of our business, but in also in the value Yahoo products bring to our user’s lives,” Marissa Mayer, Yahoo’s CEO, said in a statement with the company’s earnings results this week.
In an unusual move, however, Yahoo decided not to hold a conference call with analysts after releasing its earnings report, citing the pending deal to be acquired by Verizon.
The acquisition was originally expected to close in the first quarter of 2017.
Yahoo’s breach isn’t the only headache plaguing Verizon right now. Verizon’s CFO confirmed on the call that the global Samsung Note 7 recall impacted its overall smartphone upgrades and sales. Verizon’s Wireless sales were $22.1 billion for the quarter, down 3.19% from the same period a year earlier.
“We were off to a very good start with the Samsung Note 7 and unfortunately there was a total recall with that phone, which definitely impacted our growth,” Shammo said.
“Additionally,” he said, “we experienced an iPhone 7 backlog, primarily for upgrades.”