Verizon + Yahoo = Trouble For Consumers?

Category: Privacy

Verizon proposed on July 25 to buy Yahoo’s core assets - search, mail, instant messaging, and editorial content - for $4.83 billion. The long-anticipated deal is expected to close in early 2017, marking the end of a venerable Internet pioneer as an independent entity. But the deal could have negative consequences for consumers. Read on for the full story...

How Will the Verizon-Yahoo Merger Affect You?

Most media coverage of the Verizon-Yahoo merger discusses its effects on the two companies, advertisers, and competitors. But a handful of pundits, including yours truly, are more concerned about what the combination of a mega-ISP and a mega-content generator may mean for consumers.

Yahoo draws roughly a billion visitors monthly to its sites such as Yahoo Sports, Yahoo Finance, Yahoo Mail, Tumblr and Flickr. In spite of those impressive traffic stats, the company managed to lose over $4 billion in the last quarter of 2015. By comparison, AOL - Verizon’s $4.4 billion acquisition of last year - pulls only 130 million visitors. Both are dwarfed by Google News and Facebook, but Yahoo still represents a massive increase in editorial content for Verizon’s ambitious future plan.

That plan is to escape the commoditized, saturated market of telephony. Two-thirds of Americans now have smartphones, and that’s about everyone who wants one. Cellular service is essentially the same from one carrier to another. The only way Verizon or any other telco can grow is by stealing customers from competitors. That means cutting price, and Verizon is notoriously loath to do so. So Verizon plans to grow by adding a new revenue stream -- advertising.

Yahoo Verizon Merger effect on consumers

Global advertisers face a duopoly of Google and Facebook. Verizon wants to be their Third Choice, the new kid on the block who offers better bang for the buck. “Better” for advertisers is invariably worse for consumers’ privacy. Verizon, a major national ISP, is able and all too willing to invade its customers’ privacy.

I described one of Verizon’s dastardly tricks in my 2014 article, “EVIL -- Perma-Cookies and Your Privacy”. For years, Verizon tracked its customers’ online and real-world movements using “supercookies” that customers could not delete because they were stored on Verizon’s servers, not on users’ devices. The aggregated data was sold to marketers, who put it to unknown uses.

Dirty Deeds Done Cheap

Furthermore, Verizon did not inform customers that they were being tracked or give them the opportunity to opt out of tracking, as required by the Communications Act. That led to an FCC complaint that was finally settled in March, 2016, for the piddling sum of $1.35 million.

The unholy combination of an ISP and a content provider creates the potential for even more dirty deeds. Verizon has declared its support for the concept of Net Neutrality, under which all ISPs are expected to treat all Internet content equally. But violations of that principle can be subtle and hard to catch, even though they give a decided edge to an ISP’s own content and its accompanying advertisements.

Verizon, which handles every request for Web content that its customers make, is perfectly positioned to know what their online habits are to the finest details. Google and Facebook can only infer, and advertisers prefer certainty.

How far Verizon will push the rules protecting customers’ privacy and control of their online experiences is anyone’s guess. But with its nearly $5 billion price tag for the acquisition of Yahoo, Verizon has a great deal more incentive to push too far and too hard.

Your thoughts on this topic are welcome. Post your comment or question below...

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Most recent comments on "Verizon + Yahoo = Trouble For Consumers?"

Posted by:

Pete Karczmarczyk
05 Aug 2016

It's getting closer and closer to the movie "1984" where "Big Brother" was watching all their moves. It's getting pretty scary anymore to be alive.

Posted by:

05 Aug 2016

I don't like their move or behavior at all. How can one ensure they are not tracked by Verizon on the Web? Even visiting a site they control may be dangerous to your privacy.

Posted by:

05 Aug 2016

What I haven't seen addressed is the fate of Yahoo Groups. I run several, ranging from small family to large, international, work related one.

Bob, how about a report on alternatives to Yahoo Groups that have essentially the same functionality (files, moderation options, maillist, etc.)?

Posted by:

05 Aug 2016

As nefarious as this seems, it's nothing compared to the fact that they are filtering everything your eyes can see, which is only what they want you to see.
Long gone are the days when you could type in any subject and get a plethora of webpages with a wealth of info on any subject you desired.
Now, everything is filtered.
They aren't just satisfied in knowing where you are, where you go and what you buy.....they now want to shape how you think.

Posted by:

05 Aug 2016

Except for a few unfortunate instances where I have no choice but to use something on Yahoo, I've avoided them for many years. I don't trust them and I detest many of their policies. Since I feel pretty much the same about Verizon, I'm glad my current contract expires in 2017.

Posted by:

Curt Mixon
05 Aug 2016

Similar to the feds wanting to get rid of cash. So they can track every purchase via electronic purchase data.

Posted by:

05 Aug 2016

You should do an article on DRM and Netflick's use of the MS Edge browser to deliver superior content using Encrypted Media Extensions (EME). It has been reported and then tested and proven to be true by PC Magazine that On Windows 10, Edge is the only browser that can play Netflix's video streams — which are encumbered with Digital Restrictions Management (DRM) — in 1080p high definition. This is clearly what Net Neutrality was supposed to prevent. Microsoft has been reported to be looking and willing to use aggregated personal information as a resource for advertiser and businesses just like Verizon.
HTML5 standards, that these big companies are pushing would included DRM and allow EME to become a major part of HTML5 code and user rights would be limited further. Yahoo has been on board and a backer of DRM. Verizon's push into this space with the Yahoo acquisition does not bode well for user rights and privacy on the NET and more should be communicated about these corporate schemes as you have done today.

Posted by:

05 Aug 2016

This sounds like the Communication Act of '29 - Radio(and now TV) newspapers and content providers HAD to be SEPARATE! No co ownership till the '80's, then laze fare and see what we have today, one owner owns radio/tv/newspapers in the same town. I guess they can site precedence for this deal!
FYI the Act of '29 was intended to prevent W.R.Hearst from controlling the media.

Posted by:

05 Aug 2016

This could be interesting. My ATT.NET e-mail is done through Yahoo Mail. So if Verizon purchases Yahoo, do they get all the e-mail information?

Posted by:

arthur brogard
05 Aug 2016

I have always used Yahoo mail. Now is the time to stop, I think. Time to get all my stuff off of third party servers. No mail, no pictures, no data at all.

Keep everything on my own domains and even get to where I have my own internet server up all the time.

Impractically expensive up to now. But smartphones are getting to where they are capable of being such a thing and they're up all the time.

So my smartphone could be a buffer and my home pc's contain my own domain.

Posted by:

Pat Smart
06 Aug 2016

The minute I read the Verizon announcement, I thought about the "prodigy" email addresses I have had practically before the internet! I've gone through various transitions of servers, and each has allowed me to keep my email addresses. While I haven't been too happy with the changes ATT has made recently to its email program, particularly dealing with privacy, Verizon sounds horrible! I am also a member of several Yahoo Groups and wonder what will happen to them, some having been in existence since Yahoo was created. Any ideas how to fight this?

Posted by:

06 Aug 2016

Sorry readers, but 1984 has been here for a long time. The viewers just didn't notice, or perhaps, didn't want to see the future. The best that will happen is to slow things down. This snowball effect will run its course, as with the civilizations before ours.

Posted by:

06 Aug 2016

"YES... spelling, punctuation, grammar and proper use of UPPER/lower case are important!"

"... Verizon is notoriously *loath* to do so."

Posted by:

06 Aug 2016

I was saddened to see Verizon purchase Yahoo!. Previously, AT&T tried to do the same thing but the public outcry was so loud that the merger failed. The old Western Electric, Bell System was like a starfish with tentacles that survive long after being chopped up. I've used Yahoo! email since the turn of the century, 16 years ago. It served me well. And, I've been loath to use Google. Little by little, we are being fenced in.

Posted by:

07 Aug 2016

I have used Yahoo email for several years. Guess now is the time to get rid of them, and only use Gmail or another email provider, since Verizon is taking over Yahoo.

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