Unseen Consequences: The Ripple Effects of a Data Breach

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A data breach results in some obvious, immediate impacts. Your customers’ and/or patients’ data is exposed, for one. Even if you don’t lose their business, there will likely be some fences to mend to regain their trust.

However, what often gets lost in the aftermath of significant breaches is the ripple effect these attacks can have on all levels of your business. These ripples are currently shaking an in-transition Yahoo to its core.

Market Loss

As you’ve probably heard, Yahoo recently announced that at least 500 million user accounts were breached in a late 2014 attack, making it potentially one of the largest cyber breaches ever. This news came at a particularly bad time, as Verizon was willing to bid $4.8 billion to purchase the struggling website.

According to the New York Post, the breach has led Verizon to ask Yahoo for a $1 billion discount. The CEO of Verizon, Lowell McAdam, later denied this report, but still noted that, “we’re still understanding what was going on, to define whether it’s a material impact to the business or not. But the industrial logic of doing this merger still makes a lot of sense … I’m hoping we can get through all this stuff and get to the [deal’s] close.”

In short, despite being a major organization, Yahoo’s market value could be drastically hurt by their inability to avoid a cyber breach.

Be Wary of Mergers

This news raises important questions and concerns for all businesses thinking of acquiring or merging with another. Imagine you were to agree to purchase a company – like Verizon did – only for this purchase to suffer a massive breach.

What probably looked like a clear win for you is now cast in doubt. Other than inheriting a fire you have to put out – needing to restore this business to a level of trust and prestige in their customers’ eyes – you could also potentially put your own systems at risk.

Which is why, before purchasing any other business, a service like our Compromise Assessment should be performed to ensure there hasn’t already been a breach or that an attack isn’t lurking just around the corner. This service will verify there is no malware currently active, including a possible zero-day malware (a new, or previously unknown malware) lurking in the network of the organization being acquired.

Yahoo’s story carries with it warning signs for all businesses. From failing to implement needed security measures, to putting their evaluation at risk, everyone can take away a lesson from Yahoo on how to better secure their own business.

Remember to always look before you buy, and save yourself a lot of money and heartache

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