February 23, 2017
The revelation in September of a breach that eventually was found to have compromised personal information contained in more than a billion Yahoo accounts has cost the company’s shareholders $350 million. News of the breach, which dated back to 2014, broke during negotiations to complete the sale of Yahoo’s core operations to Verizon, which the companies had agreed to in principle only weeks earlier.
The deal will still be worth more than $4 billion, but, in addition to the reduction in the price Verizon will pay to acquire Yahoo, the companies agreed to share liability for any damages that result from government investigations or other litigation.
While most network breaches will not result in the direct loss of $350 million, the costs e-commerce companies bear when they are hacked continue to rise. Online retailers are at risk from those costs, from losses due to an erosion of customer confidence as well as being prime targets for fraudsters monetizing the stolen information.