Yahoo Confirms 3 Billion Accounts Compromised in 2013 Hack

Yahoo, which was acquired by Verizon Communications (NYSE:VZ) earlier this year, announced on Tuesday (October 3), that roughly three billion accounts were compromised in an August 2013 data breach.
According to the Oath press release–which Yahoo is now a part of–Yahoo disclosed in December 2016 that roughly 1 billion accounts had been hacked.
“Subsequent to Yahoo’s acquisition by Verizon, and during integration, the company recently obtained new intelligence and now believes, following an investigation with the assistance of outside forensic experts, that all Yahoo user accounts were affected by the August 2013 theft,” the release states.

That said, the announcement notes that compromised information does not include passwords in clear text, payment card data or bank account information, but did include names, email addresses, phone numbers, birthdates and security questions and answers.
At the time Yahoo initially disclosed the data breach late last year, the company said it “took action to protect all accounts” and directly notified identified users at the time–which required password changes, invalidating unencrypted security questions and answers to questions “so they could not be used to access an account.”
Chandra McMahon, chief information security officer of Verizon said that Verizon is “committed to the highest standards of accountability and transparency” and is working to ensure the safety and security of its user accounts, particularly in the wake of online cyberthreats.
Our investment in Yahoo is allowing that team to continue to take significant steps to enhance their security, as well as benefit from Verizon’s experience and resources,” McMahon said.
Bloomberg reported on Tuesday that Jan Dawson, analyst at Jackdaw Capital, said that most of the users affected by the 2013 attack “have already moved on.”
“Certainly this makes the hack look worse than Verizon and the rest of us thought, but I don’t know that that materially changes the valuation of Yahoo as a company or the ongoing cost of dealing with the hack,” Dawson told the outlet.
Similarly, the National Post slammed the company, calling Yahoo’s announcement a “huge embarrassment for Verizon” as it had just started running TV commercials for its Oath subsidiary, which Yahoo and AOL fall under.
That said, Yahoo’s disclosure on Tuesday doesn’t appear to have negatively impacted Verizon’s share price. At Tuesday’s close, Verizon’s stock had increased by a slight 0.95 percent to close the trading day at $49.85.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.