Yahoo! Is Giving Itself Away
Chris DeMuth Jr. • 48 Comments
Chris DeMuth Jr. • 48 Comments
Yahoo Switcheroo, Goodbye Aabaco, Hello Core Spin: Revised Sum Of The Parts
Mike Winston • 30 Comments
Mike Winston • 30 Comments
Thu, Oct. 20, 9:24 AM
- On Verizon's (NYSE:VZ) Q3 earnings conference call, retiring CFO Fran Shammo recapitulated a company line on the data breach at Yahoo (NASDAQ:YHOO), saying he did expect the intrusion could have a "material impact" on a $4.83B takeover deal.
- "This was an extremely large breach that has received a lot of attention from a lot of people," he says, noting the lawyers had their first call yesterday "but that's going to be a long process."
- Yahoo itself had canceled a call tied to its earnings released Tuesday, citing the deal.
- Upgrade activity was affected by both short supplies of iPhone 7 as well as the recall of Samsung's Galaxy Note 7 devices, Shammo and incoming CFO Matt Ellis said. Meanwhile, when it comes to pricing, "unlimited is still not something we're going to move to."
- The company is negotiating with one party on a sale of its data centers, Shammo says.
- User engagement measured as viewing time on its video service Go90 is up, now past 30 minutes per user each day, with less than 20% of the traffic served on Verizon's network.
- Shares are off 1.8% premarket with the call still ongoing. YHOO -0.2% premarket.
- Earnings call slides
- Previously: Verizon turns lower as postpaid subscribers disappoint (Oct. 20 2016)
- Previously: Verizon beats by $0.02, misses on revenue (Oct. 20 2016)
Wed, Oct. 19, 6:41 PM
- Yahoo (YHOO +2.5%) is calling for help from the government in debunking reports that it secretly scanned customer mail at the request of U.S. intelligence.
- The company had responded to a Reuters report about the scanning by calling it "misleading," and it says while it can't respond in detail to such stories, the government can.
- Yahoo sent a letter to James Clapper, director of national intelligence, asking for confirmation of such an order, to declassify it if it exists, and to make a public comment.
Wed, Oct. 19, 10:46 AM
- Yahoo (NASDAQ:YHOO) is up 2.5% today, just 4.8% below last month's 52-week high, after it posted profits that beat expectations in Q3 and analysts mostly looked past them to a pending buyout by Verizon (NYSE:VZ).
- Considering the lack of comment from Yahoo management, the results are likely to be overshadowed by Verizon's commentary when it delivers earnings tomorrow, analysts agree.
- Nomura raised its price target to $45, from $39, to reflect appreciation of the company's stake in Alibaba. Analyst Anthony Di Clemente believes Verizon would be hard pressed to show material adversity for the deal, based on similar past events, and the Yahoo results aren't likely to add any pressure there.
- An implied discount on Yahoo's Alibaba stake has increased since Verizon commented on Yahoo's breach, says SunTrust Robinson Humphrey's Bob Peck, who has a Hold rating and $42 price target. But the key question tied to the Verizon deal is whether Yahoo could even open up the process again to new bidders, he says.
- Morgan Stanley (Equal-Weight, $42 price target) and Oppenheimer (Outperform, $53) agree that any risk to the deal is overshadowed by the fact that Yahoo's basically a trading vehicle for the Alibaba stake, so BABA bullishness can outweigh any M&A concerns.
- Yahoo yesterday guided to Q4 revenue (ex-TAC) of $880M-$920M, below estimates for $938M, and to adjusted EBITDA of $260M-$300M (above a consensus for $245M).
Tue, Oct. 18, 4:19 PM
- Yahoo (YHOO -0.3%) is up 1% after hours in the aftermath of its Q3 earnings report, featuring profits that beat expectations and in-line revenues
- GAAP revenue was $1.305B (up 6.5%). The previous change in revenue presentation tied to its Microsoft Search Agreement contributed $258M; excluding that, GAAP revenue would have been $1.048B (down 15% Y/Y).
- "Mavens" revenue (mobile, video, native and social) was $524M (up 24.2%); non-Mavens revenues were $726M (up 4.8%). Total traffic-driven revenue grew 12% to $1.25B, while non-traffic-driven revenue fell to $55M from $111M.
- Mobile revenue jumped 46.1% to $396M, while desktop revenue inched up to $854M from $844M.
- The company had said it wouldn't hold a call to discuss the earnings due to its pending buyout deal with Verizon (NYSE:VZ).
- "I am pleased with our Q3 results," says CEO Marissa Mayer. "This quarter, we launched several new products and showed solid financial performance across the board; both are a testimony to the tremendous teamwork, focus, and resilience of our employees," she added, noting the company is working hard to retain user trust after its data breach and ahead of the Verizon integration.
- Press Release
Tue, Oct. 18, 4:07 PM
Tue, Oct. 18, 10:34 AM
- Needham has cut Yahoo (NASDAQ:YHOO) to Hold with talk in the air of Verizon (VZ -0.4%) potentially walking away from its deal to buy the Internet business, or getting a lower deal price.
- But valuation also plays a part as the firm reduces its rating to Hold from Buy, as does Yahoo's cancellation of its Q3 earnings call, which "also troubles us." Yahoo's up 1.5% today to $42.40, above Needham's $40 price target.
- Last week, Verizon's general counsel was quoted as saying there was a "reasonable basis" to think that the massive 500M-account data breach at Yahoo would prove material to Verizon's $4.83B deal to acquire it.
- Yesterday, Credit Suisse set a price target of $52 on Yahoo shares (implying 23% upside), and MKM Partners boosted its price target to $51 from $44.
- Yahoo reports after the bell today, but won't hold a conference call because, it says, of the pending acquisition.
Mon, Oct. 17, 5:35 PM
Thu, Oct. 13, 2:52 PM
- Verizon (NYSE:VZ) General Counsel Craig Stillman has raised alarm bells over the company's $4.83B deal to buy the Internet business at Yahoo (NASDAQ:YHOO) in saying that a "reasonable basis" exists to believe a massive user data breach at Yahoo is material to the takeover deal.
- Late last month, Yahoo confirmed a breach that happened two years ago that it believe affected 500M user accounts. And earlier this month a Reuters report said the company built a secret program to scan incoming user mail at the behest of the U.S. intelligence community.
- The breach could trigger a clause allowing for Verizon to get out of the deal, Stillman says.
- "I think we have a reasonable basis to believe right now that the impact is material and we're looking to Yahoo to demonstrate to us the full impact," he said. "If they believe that it's not, then they'll need to show us that."
- Right now: VZ +0.04%; YHOO -1.5%.
Thu, Oct. 13, 2:34 PM
- The general counsel at Verizon (NYSE:VZ) is now saying there's a "reasonable basis" to believe that a massive data breach at Yahoo (NASDAQ:YHOO) had a material impact on Verizon's $4.83B takeover agreement, Reuters reports.
- Yahoo shares are headed down, now -1.8%. VZ is flat on the day.
- The comment adds some fuel to speculation that Verizon could look to change up the existing deal, or even get out of it.
- A New York Post report last week suggested that Verizon would seek up to a $1B discount on the purchase price, with sources saying Verizon's Tim Armstrong was getting some "cold feet."
Wed, Oct. 12, 1:28 PM
- A civil liberties group with experience working civil rights and surveillance issues with Web companies has called on Verizon (VZ +0.7%) to improve user protection at its acquisition target, Yahoo (YHOO -1%).
- In the wake of reports that Yahoo allowed for scanning of incoming customer mail by government intelligence, international group Access Now is pressing Verizon to improve data protection at Yahoo, keep security staff informed of policy decisions and keep commitments to surveillance reform.
- "Verizon has a long way to go to establish trust with millions of users who now know Yahoo as inattentive to their rights and security," Access Now says. "Implementing these measures will serve as first steps."
- "We have an ongoing and constructive engagement with Access Now and will review their recommendations and consider them carefully," Verizon said in a statement.
Tue, Oct. 11, 3:38 AM
- Verizon (NYSE:VZ) CEO Lowell McAdam is "not that shocked" about Yahoo's (NASDAQ:YHOO) massive data breach and said the company is 50%-60% done with its investigation.
- Will Verizon demand a price negotiation on their $4.8B deal? "That is just total speculation - we still see a real value to the asset there," he said. "But in fairness, we're still understanding what is going on, to define whether it's a material impact to the business or not."
Fri, Oct. 7, 7:43 PM
- In what amounts to a piling up of headaches for Yahoo (YHOO -1.1%), a former media executive has charged the company with a secret campaign to purge the company of male workers.
- Scott Ard (who was fired by the company in January 2015) has filed suit and says CEO Marissa Mayer "encouraged and fostered the use of [an employee performance-rating system] to accommodate management's subjective biases and personal opinions, to the detriment of Yahoo's male employees."
- Yahoo responds that the suit has no merit: "Fairness is a guiding principle" of its annual review and reward process.
- Along with alleging flaws in the review process, Ard said 14 of 16 senior-level editorial employees hired by then-chief marketing officer Kathy Savitt in an 18-month period were female.
Thu, Oct. 6, 7:05 PM
- Following a server rack full of bad news for Yahoo (NASDAQ:YHOO), Verizon (NYSE:VZ) will be seeking a $1B discount on its $4.83B deal to acquire the company's core business, the New York Post reports.
- Yahoo recently revealed a 2014 data breach that affected 500M user accounts, and Reuters reported that the company built a secret program to allow government intelligence to scan all incoming e-mail.
- “In the last day we’ve heard that Tim [Armstrong, AOL chief who would run Yahoo for Verizon] is getting cold feet," an unnamed source told the Post. "He’s pretty upset about the lack of disclosure and he’s saying can we get out of this or can we reduce the price?”
- Armstrong reportedly flew to the West Coast in the past few days to talk about a reduction: “Tim was out there this week laying the law down and Marissa [Mayer] is trying to protect shareholders,” a source said.
- Former Yahoo chief Ross Levinsohn said yesterday that Verizon should be bucking for a reduction. "If I were them, just from a business standpoint, I'd probably reserve a bunch of money against the deal or go back to Yahoo and ask for a discount."
- After hours trading: YHOO -0.6%; VZ flat.
Wed, Oct. 5, 4:44 PM
- Yahoo's (YHOO +1.2%) former CEO, Ross Levinsohn, says it's not only likely that the company knew about both a massive data breach and the government monitoring its customers' mail -- but also that it told presumptive acquirer Verizon (VZ -0.8%) about neither of them.
- Yahoo craziness this year has risen to the level of "the Kardashian effect for Internet companies," Levinsohn says.
- Levinsohn acted as interim CEO prior to the hiring of Marissa Mayer as the company's permanent CEO in 2012.
- As for Verizon, which struck a $4.8B deal to acquire Yahoo's core business in July: "If I were them, just from a business standpoint, I'd probably reserve a bunch of money against the deal or go back to Yahoo and ask for a discount."
Wed, Oct. 5, 9:52 AM
- Yahoo (YHOO +0.5%) has responded more fully to a report that it cooperated with government intelligence officials in scanning incoming customer e-mail, calling that report "misleading."
- A terse statement released in the wake of the report -- which said Yahoo built a software program to perform character searches on all incoming mail -- said only that Yahoo was a law-abiding company and it complied with U.S. laws.
- "We narrowly interpret every government request for user data to minimize disclosure," the company is saying a new statement. "The mail scanning described in the article does not exist on our systems."
- Yesterday, Microsoft and Google (operators of major mail services Hotmail, Outlook and Gmail) said they didn't engage in scanning of mail traffic as in the Yahoo report.
Tue, Oct. 4, 7:31 PM
- Following on a report that Yahoo (NASDAQ:YHOO) scanned its customers' mail for government intelligence officials, operators of other major e-mail services -- Microsoft (MSFT, operator of Outlook and Hotmail) and Google (GOOG, GOOGL, operating Gmail) -- have issued statements saying they're safe from that sort of intrusion.
- "We have never engaged in the secret scanning of e-mail traffic like what has been reported today about Yahoo," a Microsoft spokesman told CNBC. As for Google: "We've never received such a request, but if we did, our response would be simple: 'no way.' "
- Earlier, Yahoo had said in its own statement that it complied with U.S. laws.
- With the question put to the other major services, noted whistleblower Edward Snowden today had tweeted "Heads up: Any major email service not clearly, categorically denying this tomorrow -- without careful phrasing -- is as guilty as Yahoo."