500 million Yahoo email accounts were affected in the largest data breach ever.
2. Reputation and brand damage
Yahoo has been struggling to keep up with its erstwhile competitors from its internet heyday such as Google.
Despite many acquisitions, it has failed to achieve the same adaption that its competitors have managed. For example, Yahoo has seen its share of internet search traffic snapped up by Google and other providers.
According to Netmarketshare.com, as of July Yahoo had a global search share of 7.68 percent, behind Baidu at 8.8 percent, Bing at 11.31 percent and Google at 70.16 percent.
It is a shame, then, that a service which still held a hefty chunk of the market, email, has now been cast into disrepute.
TalkTalk saw its profits halve in the quarter following its data breach. If customers blame Yahoo for the breach or no longer trust Yahoo to protect their data there could be huge consequences.
This could deprive Yahoo of a rich repository of useful data and a key revenue stream.
Yahoo works as the email backbone for several other providers, such as BT. These companies may be keen to avoid attracting bad press from Yahoo’s breach and may aim to move more customers onto their own or other services.