The fall of Yahoo! and its hopes of a crisis recovery

*Updated on 11/10/16

Yahoo!’s recent data breach was the largest ever, reports say. Reportedly, it has exposed around 500 million users’ personal details.

Names, email addresses, telephone numbers, dates of birth, encrypted passwords, and in some cases even security questions and answers, encountered hacking by what Yahoo! called a “state-sponsored actor”.

While there was no evidence to suggest any payment details were breached, it seems Yahoo! was informed of the breach by the hackers themselves earlier this year after they demanded a ransom for the return of the details. This prompts questions about the safety of Yahoo!’s services and whether it is a suitable, reputable business with core values in place.

Question marks around the brand

Undoubtedly, this revelation has not come at an ideal time for Yahoo! which is currently undergoing a $4.83bn (£3.68bn) takeover by Verizon which is expected to be completed early next year.

Once valued at around $100bn, the company, formed in 1994, rejected Microsoft’s bid of $44.6bn in 2008. At the time, Yahoo! and AOL were powerful internet tools before the emergence of Google search and Facebook took the emphasis away from them in the mid-late 2000s.

Yahoo! has struggled in recent years, after purchasing Tumblr in 2013 for approximately £1.1bn and beginning a partnership with Yelp in 2014. Furthermore, the latest revelation of data leaks questions Yahoo!’s internal policies and security measures.

Yet despite its reputation as being a ‘digital dinosaur with poor security measures’, Yahoo! continues to receive around 7bn views per month and remains the fifth most visited site worldwide.

Commenting on the breach, Jane Frost, chief executive of the Market Research Society, said: “This latest breach highlights how organisations can fall foul to having inadequate data protection policies in place.

“It’s fundamental to good business practice to embed the right data structures to safeguard the data we all rely on for commercial and public services.”

Should you use Yahoo!?

Forbes warns that if you intend to keep your Yahoo Mail account, you should at least ensure that passwords are changed and always take extra measures to prevent cyber theft.

Gmail, Google’s equivalent of Yahoo Mail, notifies a user whenever their account is logged into remotely. Likewise, various other email providers have similar levels of security, which has left Yahoo! exposed and potentially in danger of losing many of their users.

It seems that Yahoo! needs to learn from this hack and almost reinvent its platform if it is to become anything more than a starting place for people who haven’t made the effort to adopt a more modern platform for their emails and internet browsing.

Update

*Yahoo! is now facing fresh questioning about its privacy safeguards. Specifically, it was reported that embattled chief executive officer, Marissa Mayer, let the US government secretly scan hundreds of millions of user emails.

According to the Reuters report, Yahoo complied with US government orders to scan hundreds of millions of Yahoo Mail accounts. Intelligence officials wanted Yahoo to search for sets of characters, which could mean a phrase in an email or attachment.

Yahoo! responded by saying, ““We narrowly interpret every government request for user data to minimise disclosure.” Consequently, this fresh allegation does little to ease Yahoo!’s customers’ confidence in the brand and the story continues.