Did Yahoo! Blow It in Iran?

The headline from ZDNet Government's Richard Koman is a shocker:

Exclusive! Yahoo provided Iran with names of 200,000 users

Koman then details how Yahoo! (Nasdaq: YHOO  ) collaborated with the Iranian regime during the notorious election protests, by providing authorities with the names and email addresses of roughly 200,000 Iranian Yahoo! users.

If true, this could be devastating to Yahoo! After all, even though we're talking about free email, there would be a certain stigma attached to sending and receiving digital correspondences from an "@yahoo.com" address if the online giant put 200,000 protestors at risk. If you think Time Warner (NYSE: TWX  ) or Microsoft (Nasdaq: MSFT  ) have hard times handing out free email addresses given their characterization, imagine the backlash if a portal truly did something evil.

Yahoo! immediately announced that the allegations are false, and Koman's article now opens with Yahoo!'s response. Some degree of uncertainty will remain until both sides lay out their cases, but there seems to be little reason to doubt Yahoo!'s denial.

The story itself has a pretty iffy origin. The accusation first appeared as a post on the Farsi-penned Iranian Students Solidarity blog. Its claim is that Iranian Internet authorities met with Google (Nasdaq: GOOG  ) and Yahoo! when the sites were blocked during the protests following this year's controversial election. They wanted the names of the 20 million Yahoo! email accounts originating in Iran, in exchange for lifting the block. When Yahoo! countered that it was a time-consuming request, they settled for just the 200,000 addresses of those who maintain blogs.

Koman backed the blog's claims with his own unnamed sources.

If the claims sound plausible, it's because Yahoo! and Google have bent to government restrictions and requests in China in the past. Yahoo! is probably still stinging from when it turned over the contact information of a Chinese dissident, who was eventually jailed, four years ago.

Then again, it's also for this very reason that the claims are crying for some actual evidence. If Yahoo! is still feeling the pain for handing over a single dissident several years ago, why would it be so quick to surrender the contact information of 200,000 users in Iran?

There is a price to pay in the pursuit of being a global company. However, if a single country's requests or operating limitations can damage a company's reputation elsewhere, it's too dear a trade to concede.

Whether it's Google's whitewashing of searches in China for Tiananmen Square or Yahoo!'s handing over the name of a dissident for disclosures, it's not easy to be in business in restrictive governments. Is it too high a price to pay to stay in business in these territories? Share your thoughts in the comment box below.

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Longtime Fool contributor Rick Munarriz wonders whether it's time for Yahoo! to shed the exclamation point. Howns no shares in any of the stocks in this story and 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.


Read/Post Comments (3) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 09, 2009, at 2:57 PM, TrashTalker wrote:

    It is as Carl Icahn has frequently noted. These CEOs that run today's companies are nice people, but they have no clue. Their mainstay is their training in acting and being professionally coached. Whether or not ethics can ever be taught to management is a generational, systemic problem. Business schools and business models as well as the corporate entity are amoral phenomena. That means we are bounded by cultural reasoning to pursue profit at the expense of all else. No chance that someone will care who gets caught in the gristmill of r/evolution. Bonne Chance!!!

  • Report this Comment On October 09, 2009, at 3:37 PM, bliq wrote:

    Why hasn't this story been amended with the newest update to the story? Something like this should be at the top of the list of articles to be kept up to date...

    Oct. 9, 9:18 am PST — Ed note from Larry Dignan: I’m ending this back and forth now. This story, which derived from a blog post in Iran, has turned into a he said-Yahoo said go-round. Yahoo has denied the charges that it has turned over names to Iran and called the allegations completely false. Short of second and third sourcing, ZDNet must consider this report unreliable.

    http://government.zdnet.com/?p=5547

  • Report this Comment On October 09, 2009, at 3:45 PM, catoismymotor wrote:

    If this is indeed a true accounting of what happened I would have to sell my shares of Yahoo! if I owned any. If true Yahoo! decided to be the right hand of the devil in order to stay of it's path. If true I will never frequent their site again.

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