The CEO of Yahoo since 2012, Marissa Mayer, shouldered responsibility for the data breach as it occurred during her tenure. In a statement she made with a regulatory filing, she opted to not take an annual bonus this year including her annual equity grant. Instead, she requested that the amount be distributed among the employees who have worked hard towards company goals.
In September 2016, Yahoo admitted that hackers were able to get their hands on personal data from over 500 millions user accounts in 2014. But in December 2016, Yahoo confirmed that prior to this hack, in 2013, one billion user accounts of Yahoo were compromised leading to an enormous data breach. Data stolen by hackers from all these accounts included names, telephone numbers, email addresses, dates of birth, hashed passwords, and a few cases involved security questions as well.
Yahoo discovered the hack after an unnamed third party claimed certain files belonged to Yahoo users. By analyzing data files that were provided by law enforcement, Yahoo confirmed the suspicions.
As per the laws that govern the United States, companies are required to disclose such incidents as soon as they are realised as it will affect stock prices.
The move by Mayer to forego her bonus comes after an investigation which revealed Yahoo had mishandled the data breach. According to an independent committee’s findings, the security team at Yahoo was aware of the 2014 hack when it took place. Post this, senior executives and a few individuals from the legal team were informed that a state-sponsored actor had gained access to specific user accounts through the use of an account management tool.
Action was taken by consulting with police and notifying 26 users who were specifically targeted.
Although additional measures of security were put in place after the 2014 breach, it is apparent that senior executives of Yahoo did not carry out proper investigations. In light of this revelation, a conclusion was arrived at that based on the extent of knowledge the security team had about the incident, sufficient action was not taken.
Apart from being unable to keep up with its online competitors – Google and Facebook, the data breach was a bigger embarrassment for Yahoo. The company is still currently surrounded by probes and lawsuits stemming from the hacks.
Yahoo shed $350 million off the price of its core internet business. This kept Verizon still on the road to completing the deal of acquiring Yahoo’s internet business. The two companies also agreed to share the costs of the major hacks that almost sent the deal down the drain. Under the new deal, Verizon will take over Yahoo’s assets for $4.48 billion by July. This will bring to a close the 20-year run that Yahoo had as an independent company.
Yahoo will detach itself to focus on its valuable stake in Alibaba, the sensational online giant from China. Alibaba will take on a new persona and be renamed Altaba Inc. The new entity will be associated with investments.
CEO Mayer will step down from Yahoo’s board once the merger with Verizon is complete. She will, however, continue to be onboard for the core business of Yahoo.
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