Verizon is said to be demanding $1 billion off the $4.8 billion it originally agreed to pay for Yahoo's core assets following recent scandals that have engulfed the Internet company.
The US telco wants to merge the Yahoo Inc. assets with AOL Inc., another Internet property it acquired for about $4.4 billion last year, so that it can more effectively compete against the likes of Google (Nasdaq: GOOG) and Facebook in advertising markets.
But just weeks after sealing a deal with Verizon Communications Inc. (NYSE: VZ), Yahoo was revealed to have suffered a massive hack in 2014 that affected as many as 500 million user accounts.
In the last few days, Yahoo is also reported to have colluded with US government authorities on a program that involved snooping on customers' emails.
In light of those developments, Verizon is now reported by the New York Post to be seeking a substantial reduction in the fee it pays for Yahoo's core assets.
The telco is also said to have put aside about $1 billion to fund "possible liabilities" connected with the email hack.
The news comes just a day after the Investor's Business Daily reported that Verizon was closing in on a $3.5 billion sale of data center assets to Equinix. (See Verizon Nearing $3.5B Data Center Sale to Equinix – Report.)
While spending heavily on Internet properties, the operator looks keen on reducing its asset base so that it can focus efforts on service-related activities. It has previously sold parts of its fixed-line business and a number of mobile towers.