The Impact of Yahoo’s Security Breach
Yahoo recently announced that it had been hacked back in August 2013 and that the breach affected over 1 billion accounts. It has had two of the largest breaches in history, the second one having happened in 2014 and affecting about 500 million accounts. However, it assured its customers that no bank account information or any other sensitive information was compromised. The breach has had a huge impact on the company’s performance ever since, its shares having dropped by 2.4% to $39.91.
Investors were very disappointed and some even threatened to withdraw from lucrative deals with Yahoo that were just about to be closed. One of these was Verizon Communication, which had an agreement with Yahoo to buy the company’s core internet business for $4.83 billion. After the first breach, the company started having doubts about the investment it was about to make. A representative of the company said they would assess the impact of the breach that Yahoo just uncovered and then decide whether they would carry on with the deal. However, Yahoo is confident that the breach will not change anything and that Verizon will still buy its core internet business.
Following the breach, all Yahoo customers were required to change their passwords. The customers were greatly disappointed in Yahoo and said that it needs to review its security measures for their safety. If bank account information had been compromised, millions of people would have lost money and that would result in serious action against Yahoo.
Yahoo is struggling to keep up with its competitors such as Facebook and Google and the hacking incidents have been a major setback to the company. Customers are losing trust in the company and this is likely to have a huge impact on Yahoo’s financial performance. For it to remain relevant in the very competitive industry, it needs to, at the very least, protect its customers’ information.