What could happen to Yahoo if Verizon backs away from its $4.8 billion deal

As rumors swirl about Verizon's plans for acquiring Yahoo, business analysts say the former search giant could see choppier waters ahead if Verizon backs out of the deal, as some observers have suggested it should do. The initial hack could have been written off as a one-time event, analysts say, but the bigger breach will be impossible to ignore. For Verizon, the stakes have risen.

Although it has not raised fresh warning flags over the new disclosure, the telecom firm must balance Yahoo's initial estimated value against the possibility of discovering even more hackings down the road. "It’s like buying a ticking time bomb,"said Jeff Kagan, an independent industry analyst. "You never know when it’s going to blow again, and could keep blowing up time after time." Security experts have criticized Yahoo's use of outdated security technologies to defend user data, and the company's top security official resigned in protest in 2015 when he was cut out of a major decision to allow the federal government to scan customer emails. Backing out of the deal, Kagan said, probably would cause Yahoo's value to decline. But Verizon is more likely to seek a discount than to walk away, according to a mergers and acquisitions lawyer familiar with the transaction who spoke on the condition of anonymity to discuss matters of corporate strategy.