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eBay’s chief executive officer, John Donahoe, has revealed that the firm’s data breach in May has affected both user activity and revenue.
Donahoe spoke at the online auction site’s second-quarter earnings call, where he confessed that the password reset – which reached 145m users – impacted upon commerce figures.
He said that the decrease in user activity has had a domino effect on the company’s balance sheet.
The data breach saw cyber criminals hack into a database with user passwords after they stole access credentials from an employee. The firm said in May:
“There is no evidence that any financial information was accessed or compromised; however we are taking every precaution to protect our customers.”
In spite of this, the retailer was criticised for its response. A number of information security professionals were confused at a lack of communication with users regarding the breach, while others felt that the way the renewal process was handled wasn’t good enough.
Research conducted by YouGov showed that only one third of users reset their password a week after the firm shed light on the breach. Around 49 per cent of adults said they would think twice before using the service in the future.
There are still many people, especially within today’s older generation, who are wary when it comes to making transactions online. In the interest of retaining customers, businesses without a strong defence system are advised to consider ramping up their IT security efforts; in the event of a data breach, they may come to regret not doing so.
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