A good example of how a cyber attack can damage a company's reputation can be drawn from Yahoo. Since Yahoo's cyber attack resulting in the theft of a whopping 3,000,000,000 accounts' data, the company significantly lost reputation and value. Verizon, the company that wanted to buy Yahoo, slashed $350 million from the amount that it had offered to acquire the company. There was also a mass exodus of users from Yahoo to rival companies such as Gmail. Today, fewer people want to create a Yahoo account, due to the thought of hacking and data theft. Yahoo serves as a lesson to many organizations of just how badly cyber attacks can damage the reputation of an organization.
Therefore, the financial repercussions of the loss of a good reputation as a result of a hack are real and more pronounced than other types of attack, such as physical theft. The first repercussion of loss of reputation is the loss of customers. Today, Yahoo barely controls the market share that it used to control prior to the hack. Users are scared of their data being stolen by hackers. Yahoo has repeatedly been hacked, such that the security controls put in place to secure its systems and data are doubted. The way that the organization handled the hacks is another contributor to the loss of customers. The organization didn't immediately warn users that a large number of account data had been stolen. Instead, it was seemingly playing games with its users, informing them that the hack had only affected a fraction of accounts. When the initial figures were released, it was said that only 500 accounts had been hacked. However, it turned out that there were more than 3,000,000,000 affected accounts. Users felt cheated and that the attack was not dealt with as it should have been . At the same time, competitors of Yahoo, such as Google, didn't have any security scares since their security records had remained spotless for so long. It's not known how long it will take Yahoo to recover from its damaged reputation.
