by Richard Nieva January 23, 2017 2:00 PM PST @richardjnieva
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Yahoo, dealing with questions around two massive hacks, said Monday it's pushing the timeline of its expected $4.8 billion buyout by Verizon from the first quarter to the second quarter of this year.
"The opportunities ahead with Verizon look bright," Yahoo CEO Marissa Mayer said in a statement. "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."
That seems like good news for Yahoo and Mayer, who is, after all, still running a business. Surprisingly, Yahoo's fourth-quarter earnings were better than expected, with shares rising slightly in late trading after the company reported sales and profit that beat analysts' estimates.
The bigger problem is that Yahoo continues to court controversy. Already reeling from news about two hacks and its handling of email surveillance, the company is now reportedly being investigated by the Securities and Exchange Commission over allegations it was slow to tell its investors about the hacks. Even before rumors of the SEC review, Verizon was reportedly having second thoughts about its acquisition.
Which is why Mayer shifted attention to Yahoo's products, like email and fantasy sports, and the business that goes with it. That is, showing ads along with those products.
"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 said in the statement. Yahoo added that it "is working expeditiously to close the transaction as soon as practicable in Q2."
For the quarter ended in December, sales rose to $1.46 billion from $1.27 billion a year ago. Profit, minus some costs, was 25 cents a share. Yahoo beat analysts' sales expectations of $1.38 billion and beat earnings-per-share expectations of 21 cents.
That's all we'll be hearing from Mayer about earnings or Verizon because Yahoo skipped its regular call with analysts, which is usually standard operating procedure for public companies after they announce results. Yahoo would not make Mayer available for an interview. The company nixed the call last quarter too, saying it decided to go quiet because of its pending sale.
That sale is in now in question because Yahoo is reeling from the bombshell disclosures of two massive hacks, in which users had their passwords and personal information pilfered. One of them, disclosed in September, occurred in 2014 and affected 500 million user accounts. When it was announced, it was thought to be the biggest cyberattack of all time.
Three months later, Yahoo outdid itself and disclosed a hack that affected twice that number -- a billion accounts. It occurred in 2013.
The hacks haven't just been bad for Yahoo's image, they've thrown the company's entire fate into disarray. Concerns about the cyberattacks and their fallout have reportedly given Verizon executives pause about the deal, the acquisition price or both.
When Mayer joined the company in 2012, she was seen as a potential savior for the troubled internet pioneer. A former Google executive, she helped bring the company into the mobile era by refreshing all of Yahoo's services for phones and tablets. But Mayer, 41, never figured out how to make much money off the company's properties.
When, or if, Yahoo's sale to Verizon closes, what's left of Yahoo will basically be an investment company, with a lucrative stake in the Chinese ecommerce giant Alibaba worth more than $30 billion. Earlier this month, Yahoo said it will name the leftover part of the company Altaba, and reduce the number of members on its board.
Mayer and Yahoo co-founder David Filo are among those leaving the board.
Update, 3:26 p.m. PT: Yahoo clarifies the breaches affected user accounts.
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