Yahoo suffers world’s biggest hack affecting 1 billion users

A cyclist rides past a Yahoo sign at the company's headquarters in Sunnyvale, California. The Yahoo hack exposed personal details from more than 1 billion user accounts, potentially the largest breachShow more

SAN FRANCISCO // Yahoo has discovered a three-year-old security breach that enabled a hacker to compromise more than 1 billion user accounts, breaking the company’s own humiliating record for the biggest security breach in history.

The digital heist disclosed on Wednesday occurred in August 2013, more than a year before a separate hack that Yahoo announced nearly three months ago. That breach affected at least 500 million users, which had been the most far-reaching hack until the latest revelation.

“It’s shocking,” security expert Avivah Litan of Gartner said.

Both lapses occurred during the reign of Yahoo chief executive Marissa Mayer, a once-lauded leader who found herself unable to turn around the company in the four years since her arrival. Earlier this year, Yahoo agreed to sell its digital operations to Verizon Communications for $4.8 billion – a deal that may now be imperilled by the hacking revelations.

Yahoo didn’t say if it believes the same hacker might have pulled off two separate attacks. The Sunnyvale, California, company blamed the late 2014 attack on a hacker affiliated with an unidentified foreign government, but said it hasn’t been able to identify the source behind the 2013 intrusion.

Yahoo has more than a billion monthly active users, although some have multiple accounts and others have none at all. An unknown number of accounts were affected by both hacks.

In both attacks, the stolen information included names, email addresses, phone numbers, birthdates and security questions and answers. The company says it believes bank-account information and payment-card data were not affected.

But hackers also apparently stole passwords in both attacks. Technically, those passwords should be secure; Yahoo said they were scrambled twice – once by encryption and once by another technique called hashing. But hackers have become adept at cracking secured passwords by assembling huge dictionaries of similarly scrambled phrases and matching them against stolen password databases.

That could mean trouble for any users who reused their Yahoo password for other online accounts. Yahoo is requiring users to change their passwords and invalidating security questions so they can’t be used to hack into accounts.

Investors appeared worried about the Verizon deal. Yahoo’s shares fell 96 cents, or 2 per cent, to $39.95 after the disclosure of the latest hack.

* The Associated Press