From the Inbox of Sarah Palin

How safe is your Yahoo! (Nasdaq: YHOO  ) email account? You have to wonder, after Alaska Gov. Sarah Palin had her Yahoo! email account hacked into earlier this week.

Was she conducting government business through a free email account? Is there anything meaty in the online exchanges? What's the story on her husband's license plate number?

If you're looking for answers to any of those questions, you're on the wrong site. As tech-savvy investors, we want to ponder whether this episode will help or hurt Yahoo! For the company's sake, let's hope the hack was caused by a security oversight on Palin's part, and not by someone who tricked Yahoo! into retrieving the account password.

Hacks like this happen all the time, of course. They happen on free accounts such as Yahoo! Mail, Microsoft's (Nasdaq: MSFT  ) Hotmail, or Google's (Nasdaq: GOOG  ) . They happen on premium offerings from those same companies. They even happen on email accounts that accompany paid Web-access accounts, through providers such as Earthlink (Nasdaq: ELNK  ) , United Online (Nasdaq: UNTD  ) , and Time Warner's (NYSE: TWX  ) AOL. Yahoo! just happens to be in the spotlight because of the hacking victim's high profile in this instance.

Companies don't make a lot of money off free email products, but they are important. Last summer, Yahoo! President Sue Decker referred to her company's email accounts -- 250 million at the time -- as a "dormant social network." There are so many yahoo.com active accounts that the company introduced ymail.com and dusted off its old rocketmail.com options back in June.

So let's weigh both sides of this episode, apart from the obvious lessons about protecting your email password.

  • The glass is half full if you see this as welcome publicity for Yahoo! Mail. If the service is good enough for someone who may be on her way to the White House, then it's good enough for the masses.
  • The glass is half empty if you think this will scare away some of the service's active users, who have suddenly become more aware of the fragile nature of free Web-based email products.

Either way, Yahoo! is likely to be in the media spotlight over the next few days. If it can spin this story as impressively as it shook off Microsoft's advances earlier this year, this episode should ultimately be a welcome opportunity for Yahoo! to strut its stuff for a change.

Some other recent dot-com dealings:

Microsoft is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz is a fan of Yahoo! and Microsoft but not of bad weddings. He owns no shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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