In June 2012, 6.5 million LinkedIn member passwords were hacked and posted online. After reporting a strong second quarter, representatives from the professional networking site explained to investors the impact of the password leak on the company’s bottom line, as well as how they planned to handle the issue going forward.
Explained LinkedIn CEO Jeff Weiner in the quarterly earnings call:
“In June, we reported the theft of six-and-a-half million LinkedIn member passwords that were published on an unauthorized website. Though no member login information was published, we disabled the passwords of the accounts that we deemed to be at risk. Since then, we have redoubled our efforts to ensure the safety of member accounts on LinkedIn by further improving password-strengthening measures and enhancing the security of our infrastructure and data. The health of our network, as measured by member growth and engagement, is as strong as it was prior to the incident.”
Later on the call, LinkedIn SVP and CFO Steve Sordello estimated that the company had spent between $0.5 million and $1 million handling the security breach. “In taking proactive steps to update security post the June password theft, Sordello told investors,”we are assuming $2 to $3 million in second half expenses –more weighted toward the third quarter.”
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