Yahoo security problems a story of too little, too late

SAN FRANCISCO/BOSTON/WASHINGTON: IN the summer of 2013, Yahoo Inc. launched a project to better secure the passwords of its customers, abandoning the use of a discredited technology for encrypting data known as MD5.

It was too late. In August of that year, hackers got hold of more than a billion Yahoo accounts, stealing the poorly encrypted passwords and other information in the biggest data breach on record. Yahoo only recently uncovered the hack and disclosed it last week.

The timing of the attack might seem like bad luck, but the weakness of MD5 had been known by hackers and security experts for more than a decade. MD5 can be cracked more easily than other so-called “hashing” algorithms, which are mathematical functions that convert data into seemingly random character strings.

In 2008, five years before Yahoo took action, Carnegie Mellon University’s Software Engineering Institute issued a public warning to security professionals through a US government-funded vulnerability alert system: MD5 “should be considered cryptographically broken and unsuitable for further use.”

Yahoo’s failure to move away from MD5 in a timely fashion was an example of problems in Yahoo’s security operations as it grappled with business challenges, according to five former employees and some outside security experts.

“MD5 was considered dead long before 2013,” said David Kennedy, chief executive of cyber firm TrustedSec LLC. “Most companies were using more secure hashing algorithms by then.” He did not name specific firms.

Yahoo, which has confirmed it was still using MD5 at the time of the attack, disputed the notion that the company had skimped on security.

“Over the course of our more than 20-year history, Yahoo has focused on and invested in security programs and talent to protect our users,” Yahoo said in a statement to Reuters. “We have invested more than $250 million in security initiatives across the company since 2012.”

The former Yahoo security staffers, however, told Reuters the security team was at times turned down when it requested new tools and features such as strengthened cryptography protections, on the grounds that the requests would cost too much money, were too complicated, or were simply too low a priority.

Partly, that reflected the Internet pioneer’s long-running financial struggles. Reuters could not determine how many companies besides Yahoo were using MD5 in 2013. Google, Facebook and Microsoft Corp. did not immediately respond to requests for comment.

According to a former security veteran at Yahoo, even when the company was growing quickly, security sometimes took a back seat as the company focused on system performance to keep up with the growth. Then, when growth stalled, senior security staff left for other companies and the chances of getting approval for expensive upgrades dropped further, the person said. Yahoo declined to comment on details of its security practices, but said it routinely conducted drills to test and improve its cyber defenses.

Last September, Yahoo disclosed a 2014 cybertattack that affected at least 500 million customer accounts, the biggest known data breach at the time. Former Yahoo employees said the company’s security problems began before the arrival of Chief Executive Marissa Mayer in 2012 and continued under her tenure. Yahoo had suffered attacks by Russian hackers for years, two of the former staffers said.

Yahoo told Reuters it was committed to keeping users secure by staying ahead of new threats. “Today’s security landscape is complex and everevolving, but, at Yahoo, we have a deep understanding of the threats facing our users and continuously strive to stay ahead of these threats to keep our users and our platforms secure.”