Business

Yahoo’s Decline Stimulated By Many Obstacles Over Past Year

(Photo by Ethan Miller/Getty Images)

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Eric Lieberman Deputy Editor

Once one of the premiere web portals and search engines, Yahoo appears to be nose-diving. In recent months, the company is experiencing a substantial number of blunders and obstacles, which exhibits why Yahoo’s struggles will ultimately be hard to rectify.

Yahoo was forced to layoff 15 percent of its staff in February after the company announced a $4.4 billion loss in just a quarter. The company was forced to reconfigure resources and priorities in order to adjust to the massive downsizing.

“Yahoo cannot win the hearts and minds of users and advertisers with a complicated portfolio of products and assets,” said CEO Marissa Mayer, who was hired in July, 2012, according to CNN.

Mayer was criticized and censured on a number of occasions for frivolously spending money on things that were seemingly not related to the development of the company. Mayer spent $7 million on a Great Gatsby-themed holiday party in San Francisco, the Daily Mail reported.

She also was accused of spending roughly $2 million on fitness bracelets for her one-year anniversary at the corporation.

Yahoo revealed to the public last month that at least 500 million of its accounts were hacked in 2014, through what it believes to be a state-sponsored operation. It is considered to be the largest cybersecurity breach for a single company ever.

A New York Times piece detailed how Mayer and Yahoo’s leadership often battled with its cybersecurity team colloquially called the “Paranoids.” Alex Stamos, chief information security officer, and the “Paranoids,” pressed for end-to-end encryption, which would make communications and other functions only accessible to the parties involved (not even Yahoo).

Instead, Mayer and Senior Vice President Jeff Bonforte reportedly prioritized updating Yahoo’s interface and creating new features.

Reports of a lack of a stable cybersecurity infrastructure are not true, a Yahoo representative told The Daily Caller News Foundation (DCNF). While the breach was substantial, he argues that Yahoo invested $10 million in encrypting its platform. The company also had a 60 percent increase in investments for its security programs from 2015-2016, a year after the significant hack occurred.

The spokesperson listed a number of initiatives, including “Red Team” exercises, in which it practices responding against faux cyber-intrusions in order to prepare for the real thing.

An extensive investigation by Reuters revealed that Yahoo covertly created a custom software program in compliance with a federal government directive in 2015 that scanned through all of users’ incoming emails. The private company succumbed to government pressure, even though it is not known what the government was specifically looking for.

This was the first known example in history of an email provider surveying incoming communications.

Verizon, which was set to acquire Yahoo for $4.8 billion, is now seeking a $1 billion discount after the company’s cybersecurity problems and privacy issues, reports the New York Post.

Mayer is now being sued for alleged gender discrimination, according to The Mercury News. A former disgruntled Yahoo executive claims that she and two other female executives at the company systematically favored female employees over male employees regardless of performance.

“This lawsuit has no merit. With the unwavering support of our CEO we are focused on hiring employees with broad and varied backgrounds, and perspectives. As we have stated in the past, the quarterly performance review process is not only fair but has improved our overall performance,” the same representative for Yahoo told TheDCNF.

Overall, Yahoo’s reputation as a go-to search engine business has been weakening for some time now (before Mayer ever arrived). But 2015 has not been kind to the tech company and these missteps may exacerbate its potential downfall.

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