Categories: StocksTechnology

Laid Back Attitude Costs Yahoo! Inc. (NASDAQ:YHOO) Dearly

Viraj Shah :Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

The first thought that came to my mind after seeing news of Yahoo! Inc. (NASDAQ:YHOO) getting hacked was Oh Gosh…Not again..I am screwed… The next step was to answer what I do next?

I quickly log into my email and after some brooding, seek surgical efficiency in exporting my data to another Gmail which is more secured, and delete my Yahoo email account. With that, I shut down the first ever email account I had in my lifetime. However, I began to ponder as to why Yahoo is an easy target?

How and why Yahoo is a victim all the time?

Few days later, I found an article from New York Times which highlighted how Yahoo! Inc. (NASDAQ:YHOO)’s leadership failed in taking proactive steps, and how requests for plugging critical ‘technical snags’ by Yahoo’s Security Department were turned down for lack of funds. The management primary focus was to re-invent itself through new products and services. This approach was totally different to its peer Google Inc which took steps to make its security stronger.

Back in 2010, when Chinese attackers hacked Yahoo.com, many of Google’s users were also put at risk. The incident affronted Google’s co-founder, Sergey Brin. He took it personally and spent billions on hiring security engineers, creating security infrastructure and an ecosystem which ensured that any such  threat in the future was ‘never again’ successful.

Thus, Yahoo! Inc. (NASDAQ:YHOO)’s strategy to attract users went wrong drastically, as hackers chose to plug the security vulnerabilities.

Why it took two years for Yahoo to wake up?

Many remain surprised by the time Yahoo! Inc. (NASDAQ:YHOO) took to report the theft of 500 million accounts. Lawmakers in the United States are demanding an explanation for the ‘unacceptable’ delay in reporting the theft that occurred in 2014. Yahoo has also fallen short of Securities and Exchange Commission 2011 guidance to disclose hacks. CEO Marissa Mayer continues to be under pressure to minimize the impact of exposure of the breach, since the company is currently involved in selling its core business to the US network giant, Verizon Inc.

Yahoo’s lie gets caught

News agencies indicate that there was no truth in the attack being a state sponsored one as suggested by Yahoo! Inc. (NASDAQ:YHOO). According to WSJ, the hackers were criminals and it was not a state sponsored security theft. According to security firm InfoArmor, the hackers could have sold Yahoo database nearly 3X.

As Yahoo! Inc. (NASDAQ:YHOO) struggles to answer questions raised about its handling of security vulnerabilities, these steps are recommended:

1) Change passwords every month

2) Use two-factor authentication

3) Regularly check your login history

4) Don’t save passwords in your browser