Yahoo ends 2016 hoping for an authentic miracle. The company is experiencing a PR nightmare after disclosing the hacking of over 1 Billion user accounts back in 2013.
Every year hundreds of companies face times of hardship for their business, but the truth is that Yahoo’s situation is so delicate, it might mark the death of the company. Despite the board of directive’s efforts to keep the boat afloat, their hopes haven’t materialized, at least for the moment.
Yahoo revealed that in 2013 it was the victim of a hacking incident that resulted in the leakage (the worst in the company’s history) of over 1 billion accounts. The news came 3 months after Yahoo admitted to another hack back in September of 2014, which caused the disclosure of information regarding at least 500 million accounts.
The leaked information included usernames, cell phone numbers, birthdates, email addresses, and hashed passwords. The hashing algorithm used by Yahoo was MD5, an archaic and vulnerable protocol that can be torn apart easily by hackers.
The company started a transformation period that began in 2012. Marissa Meyer signed up for the CEO role promising a total restructuring of the company. She kept her promise, and the company has initiated a 15% cut off of its workforce, along with profound changes in the way Yahoo runs its business, shifting away from unprofitable ventures.
In retrospect, one could argue that Yahoo lost a golden opportunity when Microsoft offered a $45 billion buy offer for the company. Unfortunately, mismanagement, bad projects, and obsolete products caused a massive drop in valuation.
According to several media outlets, Yahoo was in the middle of serious talks with telecommunication company giant Verizon, it is said that a 4.8 billion offer was on the table when the news of the hacking incident dropped. Rumors circulated about Verizon allegedly deciding to put a hold on the offer.
The news comes as a severe blow to Merissa Mayer’s plans, as mainstream media is blaming her for reducing the company’s security team budget.
Andrew Komarov, chief intelligence officer at InfoArmor, said the attack against Yahoo was carried out by a group of four Russian cyber criminals called Group E. Yahoo claimed that the attacks were the works of a ‘state-sponsored’ actor, but analysts such as Komarov disregard that claim.