October 5, 2017 / 8:07 PM / a year ago

Breakingviews - Yahoo’s corpse keeps festering at Verizon

NEW YORK (Reuters Breakingviews) - Yahoo is like a zombie feasting on Verizon’s brains. Marni Walden, a top executive at the $200 billion U.S. telecom group, is leaving just a day after the internet firm she helped to acquire tripled its tally of customer accounts exposed to a 2013 hack. While the company suggests the timing is a coincidence, it’s clear that Yahoo is a problem that continues to fester.

Marni Walden EVP president of product and new business innovation at Verizon speaks at the WSJD Live conference in Laguna Beach, California, U.S., October 26, 2016. REUTERS/Mike Blake

Verizon disclosed that Walden will exit at the end of the year in a two-sentence regulatory filing on Wednesday. The 50-year-old executive vice president was a rising star and a rare female in the upper ranks, who could have been a credible successor to Chief Executive Lowell McAdam. As the head of media, Walden also oversaw the creation of Oath, a combination of acquired 1990s internet brands Yahoo and AOL, to help shore up Verizon’s digital advertising offerings.

Even if buying Yahoo had a certain business rationale, it has proven to be a real pain in the side. Two hacking incidents revealed last year nearly scotched the deal. Verizon wrangled a $350 million price cut from Yahoo Chief Executive Marissa Mayer, but that may have been too little. On Tuesday it emerged that all 3 billion of Yahoo’s user accounts were compromised.

Verizon said that Walden’s departure and the latest revelation were unrelated. She is pursuing outside opportunities because she was unlikely to be the next chief executive, the Wall Street Journal reported. Others now in the running to replace McAdam, 63, include John Stratton, head of global operations, and Hans Vestberg, who once led Ericsson and is now Verizon’s chief technology officer.

Either of those would suggest that Verizon is now more interested in building out a fiber network than reinventing the media landscape. At least it only plunked down $9 billion for Oath. Meanwhile, rival AT&T is still splashing out on satellite distribution and media, paying some $175 billion for DirecTV and Time Warner. It ought to learn from Verizon’s experience: risky deals may come back to haunt.

(The spelling of “compromised” has been corrected in paragraph three of this item.)


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