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BUSINESS Wednesday 22 February
A25

Yahoo salvages Verizon deal with $350 million discount

MICHAEL LIEDTKE tion and new businesses,
TALI ARBEL said in a statement. Yahoo
AP Technology Writers shareholders have to ap-
SAN FRANCISCO (AP) — prove it.
Yahoo is taking a $350 mil- Avoiding an even larger
lion hit on its previously an- reduction in the deal val-
nounced $4.8 billion sale ue represents a small vic-
to Verizon in a concession tory for Yahoo CEO Marissa
for security lapses that ex- Mayer, who had already
posed personal information been under fire on Wall
stored in more than 1 billion Street for her inability to turn
Yahoo user accounts. around the company and
The revised agreement, an- then for the humiliating se-
nounced Tuesday, eases curity lapses that came un-
investor worries that Ve- der her watch.
rizon Communications Inc. “Yahoo had to get this deal
would demand a discount done. There is no better fit
of at least $1 billion or can- for them than Verizon,” said
cel the deal entirely. Doug Melsheimer, manag-
The hacking bombshells, ing director for Bulger Part-
disclosed after the two ners, an investment bank-
companies agreed on a ing firm specializing in tech-
sale, represent the two big- This photo shows the Yahoo and Verizon logos on a laptop, in North Andover, Mass. Yahoo is tak- nology.
gest security breaches in ing a $350 million hit on its previously announced $4.8 billion sale to Verizon in a concession for se- Mayer, 41, is widely expect-
internet history. curity lapses that exposed personal information stored in more than 1 billion Yahoo user accounts. ed to step down after Ve-
The breaches raised con- The revised agreement announced Tuesday, Feb. 21, 2017, eases investor worries that Verizon rizon takes over, although
cerns that people might Communications Inc. would demand a discount of at least $1 billion or cancel the deal entirely. she hasn’t spelled out her
decrease their use of Ya- (AP Photo/Elise Amendola) plans definitively. If she de-
hoo email and other digi- and the lengthy delay in After the Verizon deal clos- Securities and Exchange parts, Mayer will leave with
tal services that Verizon is discovering and disclosing es, any future bills stemming Commission probe into a severance package that
buying. A smaller audience the hacks. The separate from the hack will be shoul- how Yahoo handled the was valued at $44 million
makes Yahoo’s services attacks occurred in 2013 dered by Altaba Inc. — a disclosure of the massive last summer. The package
less valuable because it re- and 2014; Yahoo disclosed company that will become hacks. Verizon and Altaba is probably worth even
duces the opportunities to them this past September the caretaker of Yahoo’s will split costs from all other more now because it pri-
show ads — the main rea- and December. remains, which will include hack-related lawsuits and marily consists of Yahoo
son that Verizon struck the The lower price, now about $7 billion in cash and government investigations. stock, which has risen by
deal seven months ago. pegged at $4.48 billion, will lucrative stakes in Chinese This agreement “provides nearly 20 percent since last
Yahoo has maintained that cost Yahoo shareholders e-commerce giant Alibaba protections for both sides” summer.
its users have remained roughly 37 cents per share. Group and Yahoo Japan. and should help the deal Yahoo shares rose 40 cents
loyal, despite any mistrust But they may also be re- Altaba will be responsible close by the end of June, to close at $45.50 while Ver-
that might have been sponsible for substantial le- for all costs stemming from Marni Walden, Verizon’s izon’s stock added 24 cents
caused by its lax security gal costs. shareholder lawsuits and a head of product innova- to finish at $49.43. q
Macy’s profit falls nearly 13 percent as sales slide

A. D’INNOCENZIO as it tries to regroup. $544 million, or $1.73 per Jeff Gennette, has been but has seen sales slow as
AP Retail Writer Macy’s has also been un- share, in the year-ago pe- credited for nearly dou- it and other traditional de-
NEW YORK (AP) — Macy’s, der pressure from share- riod. Adjusted earnings per bling sales during his ten- partment store chains face
the nation’s largest de- holders to get more value share came to $2.02. Ana- ure at the top. And Macy’s competition from online
partment store chain, says out of its real estate hold- lysts had expected $1.95 had been a stellar per- leader Amazon and off-
its earnings for the quarter ings, which activist inves- per share for the quarter, former after the recession, price rivals.q
that includes the holiday tor Starboard says is worth according to FactSet. Rev-
period dropped nearly 13 nearly $21 billion. The chain enue fell 4 percent to $8.52
percent as results were has reportedly been in pre- billion, while analysts had
dragged down by lower liminary talks with Hudson’s expected $8.61 billion.
sales, store closures and Bay about a takeover or a “While 2016 was not the
other costs. The profit results real estate deal. However, year we expected, we
beat Wall Street expecta- Macy’s declined to talk made significant progress
tions, but Macy’s said it about the topic Tuesday, on key initiatives that are
would post another year of saying it doesn’t comment starting to bear fruit,” Ma-
sales declines for a key rev- on rumors. It did say it will cy’s CEO Terry Lundgren
enue measure. The latest be looking to further mon- said in a statement. Those
quarter marks the eighth etize its locations. Macy’s include a new approach
straight period of sales de- has been closing stores to merchandising fine jew-
clines for the critical met- and selling off key loca- elry and women’s shoes,
ric. Like many department tions; those moves deliv- an increase in exclusive
stores, Macy’s has faced ered $673 million in the lat- products and testing an
sluggish sales as customers est year in asset sales. off-price strategy that aims
buy more online and less For the three months end- at rivals like T.J. Maxx.
at the malls where they are ed Jan. 28, Macy’s earned Lundgren, who will be step-
often an anchor. Macy’s $475 million, or $1.54 per ping down March 23 to be
has been shuttering stores share. That compares with succeeded by President