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Amid Security Questions, Yahoo Says It's Delaying Merger With Verizon

The Wall Street Journal reported that regulators are investigating whether Yahoo disclosed two massive breaches to its investors in a timely manner.
Image: A Yahoo logo is pictured in front of a building in Rolle
A Yahoo building in Rolle, Switzerland, in 2012.Denis Balibouse / Reuters - file

The stop-start mega-merger of Yahoo Inc. and Verizon Communications Inc. is being delayed, Yahoo told federal regulators Monday as the company deals with investigations of two massive security breaches.

The $5 billion merger, under which Verizon would assume control of Yahoo's core businesses while spinning others off into separate enterprises, was announced last July, with a timetable to be complete by March 31.

But in a quarterly financial report filed Monday with the Securities and Exchange Commission, covering October, November and December, Yahoo said "the transaction is now expected to close in Q2 of 2017," which begins April 1.

Related: Yahoo Mega-Breach Exposes More Than 1 Billion Accounts

Yahoo said its fourth-quarter results not only held steady but actually improved slightly, even as it dealt with a drumbeat of unfavorable news coverage of two major breaches of users' data — one in 2013 and a second in 2014. The breaches — the two largest ever on record — weren't revealed until September and December of last year.

Numerous law enforcement agencies are investigating the breaches themselves. But Sunday, The Wall Street Journal quoted unnamed sources as saying the SEC had opened a separate investigation into whether Yahoo disclosed them in a timely manner to its investors, as it's required to do as a publicly traded company.

The SEC told NBC News it had no comment on the Journal report. Yahoo referred NBC News to statements it made in November saying it was cooperating with all federal investigations.

But in a statement accompanying Yahoo's financial report, Chief Executive Marissa Mayer said, "The opportunities ahead with Verizon look bright."

If they are, Mayer likely won't be involved. In an SEC filing early this month, Yahoo disclosed that Mayer — one of the highest-profile women in the predominantly male tech world — would resign from Yahoo's board once the Verizon merger closes.