Still, shares of Yahoo! continued their decline, falling 46 cents, or 1.1%, to $42.34 on Monday afternoon. The stock is down 4% from Sept. 22, the day before Yahoo! announced that a 2014 hack had compromised data from 500 million user accounts. Verizon shares were down 0.7% to $52.19 on Friday.
"It is very, very early stage. We will work with Yahoo! on it and see what the implications are," Amstrong said on CNBC, adding that Verizon learned about the incursion last week.
Armstrong would not comment when asked if Verizon would seek to potentially renegotiate its purchase price for Yahoo!'s core business for $4.8 billion in cash, or $5.9 billion including the purchase of restricted stock units. But he did say that "we really want to be protective of and watch out for" Verizon shareholders, adding that "at the end of the day it's consumer trust that we're focused on."
He also noted that the initial integration of the two companies "is going well."
Despite the size of Yahoo's breach, Robert Peck of SunTrust wrote last week that the deal would not likely trip the "material adverse effect" clause in the Verizon transaction, a customary provision that outlines when a buyer can back out of a deal.
"The sale agreement does not discuss price adjustments upon change in business outlook," Peck wrote, noting that the clause would not be triggered by "any failure by Yahoo! to meet its internal or published projections, budgets, plans, or forecasts of its revenues, earnings, or other financial performance or results of operations."
Even counting for the defection of users because of the hack, Peck estimated that Yahoo! would only be worth about 2% less.
Another analyst agreed that the breach would not likely trigger the material adverse effect clause because the ultimate financial impact would not be great. Yahoo! might ultimately face a $30 million to $40 million settlement with users, the person suggested, a small number compared to Verizon's payout.
Verizon declined to comment last week on whether it could exercise the adverse effect clause.
"We understand that Yahoo is conducting an active investigation of this matter, but we otherwise have limited information and understanding of the impact," the company said in a statement last week.
While the attack may not dissuade the buyer, Yahoo!'s user base is a big part of its appeal to Armstrong, who runs the telecom's AOL unit.
"If you talk about success [in this] landscape, I would say it's monthly active users, like how many monthly active users do we have engaged on these platforms overall," Armstrong told investors at a Bank of America Merrill Lynch conference in mid-September, putting the combined user base of Yahoo! and AOL at more than 1 billion.
Whatever impact the breach has or does not have on Verizon, the attack is massive. Wells Fargo analyst Gray Powell wrote that the incident sets a record. "With 500 million+ account credentials stolen, this would make the largest compromise of all time, topping the MySpace breach involving 427 million user accounts," Powell wrote.
And the fallout could be even greater, if re-used passwords and security question information allows hackers to access other web sites.