Verizon's purchase of Yahoo's Internet business puts privacy at risk

Verizon's acquisition of Yahoo's internet business could have implications for user privacy, following on from the company's AOL purchase. Verizon bought AOL's ad network and customer base along with its internet portal and then announced that all customer data would now be shared with Verizon’s own advertising network. The company has the opportunity to grow its network even further with the purchase of Yahoo. Verizon is building a data empire with the authority to use private information as it sees fit.

Verizon has now confirmed that it will buy Yahoo in $4.8 billion-dollar deal. Not included in the purchase are Yahoo's stake in Alibaba, Yahoo's Japan shares, its non-core patents, or any other minority investments. All of these will be spun off from Yahoo in a new business. The deal should be complete in early 2017.

For the past four years, Marissa Meyers has prominently helped and attempted to guide Yahoo back to something approaching relevance. While the company is one of the earliest giants of the Internet, its increasingly irrelevant in the modern era, which has been dominated by companies like Google and Facebook, while companies like Microsoft and Amazon have made substantial strides in cloud services. Now, there's talk that Verizon and Yahoo are close to a deal for the company's core Internet properties. Yahoo also owns a significant stake in Alibaba, the Chinese online giant, but that stake isn't part of this deal.

Bloomberg reports that Verizon is buying Yahoo's core Internet business and its real estate holdings for an estimated $5 billion. Presumably this would also include services like Tumblr and Flickr, as well as Yahoo's various themed pages for gaming, search, groups, real estate, email, and more. The deal could have significant ramifications for user privacy, particularly after Verizon's actions in the wake of its AOL purchase.

When Verizon bought AOL, it didn't just snap up the preferred Internet portal of the 80-and-older crowd, it also bought the company's advertising network and customer base. It wasn't long after that Verizon announced it would no longer even pretend to anonymize customer data for advertising purposes. Instead, all customer data would now be shared with Verizon's own advertising network. By buying Yahoo, Verizon has the opportunity to extend this reach even further. And it's not just Verizon -- other telcos are performing their own kind of data analysis and mining customer information for profit.

True, Yahoo isn't a major player in the advertising industry and its web properties aren't as well-known these days as some of its counterparts. But access to Flickr, Tumblr, and other services gives Verizon additional reach for user tracking and profile generation. Roger Entner, an analyst with Recon Analytics LLC, told (Opens in a new window)Bloomberg: "This will expand Verizon’s advertising base by 200 million more visitors,” Entner said. “This will be a large driver of the advertising engine. They also can collect a whole lot more user data to make the ads more relevant. They will be in more places with better ads."

There's no talk of how this deal would be better for consumers or customers because it won't be. This is about extracting more value from said individuals by grinding up their data a little more finely and distributing it among a wider variety of companies. This is about Verizon building a data empire in which it's explicitly given itself the authority to use your private information any way it wants. Given that the company also sells wireless and wired Internet access, you literally pay Verizon to access the Internet so it can gather non-anonymous data and then make money selling that data to other companies -- or use it for its own marketing purposes.

It's enough to make the debate over undeletable super-cookies look positively quaint. But of course, that's the point. The concept of privacy has been so weakened by decades of attacks by both the government and the private sector, business plans that would've led to explosions of outrage from concerned citizens if they'd been proposed in 1996 barely generate a murmur of discontent in 2016.