How is Yahoo doing after the data breach?
Yahoo reported an increase in profits for the third quarter of this year, with earnings of $162.8 million, or 17 cents per share 鈥� a timely bit of reassuring news for a company that saw its credibility suffer greatly after a massive data breach.
鈥淔rankly, I look at the numbers, they鈥檙e not that bad relative to what they could have been,鈥� JMP Securities analyst Ron Josey . 鈥淚t should be somewhat more comforting to see that things aren鈥檛 falling off a cliff.鈥�
Perhaps more surprisingly, the number of emails sent and read by users also rose, as well as the number of page views on the email service 鈥� this, after the company acknowledged in September that more than 500 million users鈥� accounts were hacked back in late 2014, a belated announcement that of its security capabilities. And earlier this month, Reuters reported that hundreds of millions of users鈥� emails for evidence of terrorist activity at the behest of law-enforcement authorities, raising fresh doubts about the privacy of users鈥� communications.
But many Yahoo email users are apparently persisting, in what could be a reflection of what is longstanding habits when it comes to certain cyber-security practices.
In one 2015 conference paper analyzing why cyber-security awareness campaigns often failed to change behavior, that influencing users鈥� behavior effectively would require more than simply providing them with information. Users "need, first of all, to accept that the information is relevant, secondly, understand how they ought to respond, and thirdly, be willing to do this in the face of many other demands," they wrote.聽
The latest earnings report isn鈥檛 all rosy news for Yahoo, by any means. The company has benefitted from a cost-cutting program that saw one-fifth of its workforce, or some 2,200 workers, laid off over the past year, according to the Associated Press. But after subtracting advertising commissions for July through September, its revenue fell 14 percent, to $857 million 鈥� the fourth consecutive quarterly plunge of 10 percent or more. Projections by the company鈥檚 management see it extending into the final three months of the year.
The chief danger facing the company is the fate of a $4.83 billion buyout from Verizon, which has recently hinted at having cold feet. The buyout was announced in July, just a few months before the Yahoo data breach was made public.
Last week, Verizon general counsel Craig Silliman told Reuters that before the SEC and European Commission performed their review of the merger, if the data breach were found to have had a 鈥渕aterial adverse effect鈥� on the business.
"I think we have a reasonable basis to believe right now that the impact is material and we're looking to Yahoo to demonstrate to us the full impact," said Mr. Silliman. "If they believe that it's not then they'll need to show us that."
