500 million Yahoo accounts breached
Yahoo recommends that users who haven’t changed their passwords since 2014 do so. The company said it was notifying potentially affected users and taking steps to secure their accounts. That included invalidating unencrypted security questions and answers and asking users to change their passwords.
Verizon sale in progress
The announcement comes as Yahoo looks to complete its $4.8. billion sale of its core Internet business to media giant Verizon Communications, which said it was notified of the Yahoo breach "within the last two days." "We understand that Yahoo is conducting an active investigation of this matter, but we otherwise have limited information and understanding of the impact," Verizon said. Given the unsettled nature of Yahoo's ownership just now, “regulators should be concerned with who will take responsibility for the response to this compromise. It can be easy for the ‘right thing to do’ to slip through the cracks in a multi-billion dollar transition," said Tim Erlin, senior director of IT security and risk strategy at Tripwire, a computer security firm. The breach doesn't threaten Verizon's acquisition of Yahoo, says SunTrust Robinson Humphreys internet equity analyst Robert Peck. But the investigation will likely lead to findings that perhaps 5% of users have left Yahoo and that could yield a lower price for Verizon. Should the result be that Yahoo has 5 million to 10 million fewer users than when the transaction was announced in July, "this could affect the Verizon purchase price from around $100 million to $200 million," Peck said. "We don’t think it’s a dealmaker. If anything it’s a small adjustment to the total price." Yahoo Chief Executive Officer Marissa Mayer has pledged to stay on with the company through the close of the merger, which is being overseen by Verizon's Marni Walden and AOL CEO Tim Armstrong. Yahoo shares (YHOO) were flat Thursday. Verizon (VZ) shares were up 1% at $52.39. Since the security breach is so massive, users' Internet accounts beyond Yahoo could be affected. As is typical with these large hacks, experts recommend account holders should also change passwords and security questions and answers for any other accounts on which they use the same or similar information used for their Yahoo account. In addition, avoid clicking on links or downloading attachments from suspicious emails that claim to be updates from Yahoo about the breach. Hackers often use news of big breaches to conduct "phishing" campaigns. Yahoo users should be cautious of unsolicited communications that ask for personal information,Yahoo said. Finally, all users should review their online accounts for suspicious activity
Most consumers might not think there’s much in their Yahoo account that would be of use to hackers, which typically might only include their email and Yahoo password. However, that pair of information offers multiple uses for ingenious hackers bent on extracting the maximum value from information, say experts. First, the password. According to a Gartner survey, 50% of users reuse their passwords across multiple platforms. So armed with an email address and Yahoo password, hackers might be able to gain access to multiple accounts. The technique is called “credential stuffing” and it’s become epidemic over the last year and a half, said Avivah Litan, a vice president and analyst at Gartner Research. “The bad guys get lists of user IDs and password and then test them, they run through them at all the sites they want to attack to see where they work,” she says. Once hackers gain access to other accounts, they are able to assemble dossiers on individuals. These are called “fullz” and include as much information as the hacking group has about a person, assembled from multiple sources over time. Typically they contain the person’s name, Social Security number, birth date, address, birthday, account numbers and other data. "There are fullz available probably for most of the U.S. population,” said Litan. The attackers don’t only use that information to go after bank accounts and credit cards, but also less obvious and harder to track information that is still worth money on the black market. That can include loyalty points at hotel chains and airlines, avatars and points from online games, even stored value in coffee cards. Once accessed, all of these can be siphoned off, bundled and then resold. “They’ve gone low, slow and distributed. You used to be able to see these attacks coming through really quickly after a breach,” said Litan. Instead organized crime groups take their time, harvesting points and value. “It’s very lucrative,” said Litan. Contributing: Kevin Johnson in Washington and Mike Snider in McLean, Va.