Verizon says Yahoo hack could have 'material affect' on deal

Verizon said Thursday the massive breach affecting 500 million Yahoo customers could have a "material" effect on the $4.8 billion deal to acquire key assets of the Internet group.

The comments from Verizon general counsel Craig Silliman suggest the US telecom giant could seek to reduce the purchase price or walk away from the deal.

"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." Silliman told a group of reporters.

"If they believe that it's not then they'll need to show us that."

The use of the term "material" by Verizon would suggest a substantive change in the value of Yahoo that was not previously known, which could allow the telecom group to lower its offer or scrap the deal.

Yahoo last month announced the hack in late 2014 affecting some 500 million users worldwide, a fresh blow to the faded internet star. It said the attack was likely "state sponsored," although some analysts questioned the source.

Responding to the Verizon comments, a Yahoo spokesman said in an emailed statement: "We are confident in Yahoo's value and we continue to work towards integration with Verizon."

Yahoo agreed in July to sell its core assets to Verizon for $4.8 billion, ending a 20-year run as an independent company for the internet pioneer.

The deal would separate the Yahoo internet assets from its more valuable stake in Chinese online giant Alibaba.

Yahoo has made several attempts to refocus after falling behind Google and Facebook in key segments of online advertising.

Yahoo denies surveillance claims amid privacy outcry

Yahoo on Wednesday rejected allegations of mass email surveillance amid an outcry from privacy activists over a report that it created a special scanning program at the behest of US intelligence.

The report, which said the US internet giant secretly scanned hundreds of millions of email accounts to help American intelligence, was "misleading," Yahoo said.

"We narrowly interpret every government request for user data to minimize disclosure," the company said in a statement to AFP. "The mail scanning described in the article does not exist on our systems."

A report Tuesday by Reuters news agency, citing former employees of the internet firm as sources, said Yahoo had built a custom program in 2015 which scanned all its emails to help the National Security Agency (NSA) and the FBI.

People took to twitter to express their opinions on the matter by even giving tips on how to permanently delete your e-mail account.

The New York Times reported Wednesday that Yahoo had been ordered by a federal judge to search its emails for a digital "signature" in an investigation seeking information about a state-sponsored entity linked to attacks.

The Times, quoting an unnamed government official, said that in order to comply with the Foreign Intelligence Surveillance Court order, Yahoo had needed to modify its software which scans for spam and child pornography.

According to the Times' report, the government request was unusual because it required Yahoo to systematically scan all of its users' emails -- rather than hand over data from specific users.

The Office of the Director of National Intelligence, which oversees the NSA, did not respond directly to the claims but said in a statement it does not comment on "specific techniques" to gather intelligence.

The statement echoed earlier remarks from intelligence officials, saying: "The United States only uses signals intelligence for national security purposes, and not for the purpose of indiscriminately reviewing the emails or phone calls of ordinary people."