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Hacker Catches Yahoo! Off Guard

By Rick Munarriz – Updated Apr 5, 2017 at 8:46PM

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The lax password retrieval system may be to blame for the hacking into Sarah Palin's account.

You already know about the hacker who broke into the Yahoo! (NASDAQ:YHOO) email account of vice presidential candidate Sarah Palin, publishing the contents for everyone to see.

As details of the account's hijacking begin to roll out, it seems as if Yahoo!'s lax password retrieval interface may have been the key.

Initial reports say the alleged hacker confessed to the simplicity of breaking into the account, which basically entailed providing Yahoo!'s automated engine for forgotten passwords with answers like the Alaskan governor's email, her ZIP code, and where she met her spouse.

Set your political affiliations aside. Let's even set aside where you stand on email snooping. The key takeaway for Yahoo! investors here is that Yahoo! is apparently quite vulnerable.

"For Yahoo!'s sake, let's hope that it was a security oversight on Palin's part and not the result of a hacker tricking Yahoo! into retrieving the password," I wrote earlier this week.

Unfortunately, it seems as if it's the retrieval system. Yes, Palin probably could have done the smart thing and make up obscure answers to the questions, but most Internet users approach free Webmail offerings -- such as Yahoo! Mail, Microsoft's (NASDAQ:MSFT) Hotmail, Google's (NASDAQ:GOOG) Gmail, or Time Warner's (NYSE:TWX) AOL -- casually.

This naturally opens the door for rivals to promote their user safeguards. Broadband providers such as Comcast (NASDAQ:CMCSA) and AT&T (NYSE:T) that provide email accounts to paying subscribers no doubt will jump on this incident to market their own alternatives.

Yahoo! can't afford to stay quiet. With more than 260 million active accounts, it will need to shore up confidence that it can protect its users.

In his alleged online confession, the hacker laments that he didn't find anything juicy in the emails. He did, though. He unearthed flaws at Yahoo!

Some other recent dot-com dealings:

Microsoft is a Motley Fool Inside Value recommendation. Google is a Rule Breakers recommendation.

Longtime Fool contributor Rick Munarriz is a fan of Yahoo! and Microsoft, but not of bad weddings. Howns 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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