LinkedIn has admitted that the investigation and clean-up costs of the data breach which rocked the site in June could have topped $1m (£643,000).
The breach first came to light when a hacker with the username ‘dwdm’ appealed for help on a Russian forum to decrypt 6.5 million files and access original passwords. Only a day later, hackers claimed to have revealed hundreds of thousands of passwords.
LinkedIn was criticised for its slow reaction; a move which also showed the folly of the proposed data breach rules in the new EU data protection laws.
The cost of the breach was revealed by the Steve Sordello, chief financial officer at LinkedIn, in a conference call with journalists and analysts about the firm’s second quarter financial results.
He said LinkedIn continued to strengthen its security and is expected to add $2m to $3m in costs in the current quarter towards this.
Since the breach, LinkedIn has improved password-strengthening measures and enhanced the security of its infrastructure and data, said chief executive Jeff Weiner in the conference call.
Weiner claimed that in terms of membership growth and engagement the “health” of LinkedIn remains as strong as it was before the breach.
Despite the breach, LinkedIn reported strong revenue in the second quarter from advertising and premium subscriptions.
Revenue for the second quarter was $228m, an increase of 89% compared with $121m in the second quarter of 2011.
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