Yahoo 'state' hackers stole data from 500 million users

The breach included swathes of personal information, including names and emails, as well as "unencrypted security questions and answers”.

The hack took place in 2014 but has only now been made public.

The FBI has confirmed it is investigating the claims.

The data taken includes names, email addresses, telephone numbers, dates of birth and encrypted passwords, but not credit card data, Yahoo said.

The company said the information was "stolen by what we believe is a state-sponsored actor" but did not say which country it held responsible.

News of a possible major attack on the technology firm emerged in August when a hacker known as "Peace" was apparently attempting to sell information on 200 million Yahoo accounts.

On Thursday, Yahoo confirmed the breach was far bigger than first thought.

Yahoo is recommending all users should change their passwords if they have not done so since 2014.

Questions for Yahoo - Dave Lee, BBC North America technology reporter, San Francisco

The nature of the information stolen feels somewhat run-of-the-mill - no payment info, and passwords were encrypted. Good. But the chain of events leading up to this unprecedented announcement gives rise to some incredibly pressing questions for Yahoo.

Why did it take so long to confirm the hack and its scale? Why did it take so long to tell users and prompt them to protect themselves?

State-sponsored attacks are typically for political, not financial gain. So why were details reportedly being sold online? What evidence is there that it was state-sponsored?

Verizon, which has agreed to buy Yahoo, said it had not been told until a couple of days ago - why not? And why is Marissa Mayer, a chief executive who has presided over bad deals and now the biggest breach in internet history, still in charge?

In July, Yahoo was sold to US telecoms giant Verizon for $4.8bn (£3.7bn).

Verizon told the BBC it had learned of the hack "within the last two days" and said it had "limited information".

It added: "Until then, we are not in position to further comment."

Yahoo said in a statement: "Online intrusions and thefts by state-sponsored actors have become increasingly common across the technology industry."

Reuters reported three unnamed US intelligence officials as saying they believed the attack was state-sponsored because it was similar to previous hacks linked to Russian intelligence agencies.

Nikki Parker, vice-president at security company Covata, said: "Yahoo is likely to come under intense scrutiny from regulators, the media and public and rightly so. Corporations can't shy away from data breaches and they must hold their hands up and show that they are committed to resolving the problem."

She added: "Let's hope the ink is dry on the contract with Verizon."

Questions are being asked about the length of time it took Yahoo to fully acknowledge the breach.

"It is really worrying that a breach from 2014 can have gone undetected for so long," said Prof Alan Woodward from the University of Surrey.

"It is also surprising the public statement took so long to appear."

Top 10 previous breaches

MySpace accounts - 359m

LinkedIn accounts - 164m

Adobe accounts - 152m

Badoo accounts - 112m

VK accounts - 93m

Dropbox accounts - 68m

tumblr accounts - 65m

iMesh accounts - 49m

Fling accounts - 40m

Last.fm accounts - 37m

Source - haveibeenpwned.com

"I would have thought most companies had learned by now that early disclosure is better, even if you have to revise and update as you learn more."

The scale of the hack eclipses other recent, major tech breaches - such as MySpace (359 million), LinkedIn (164 million) and Adobe (152 million).

Yahoo was founded in 1994 by Jerry Yang and David Filo. In its first decade it was a pioneer of internet services.

Once the most popular website in the US, it was worth about $125bn, but Yahoo lost ground towards the end of the first decade of the century, leading to its purchase by Verizon.

Verizon's motivation for purchasing the struggling Yahoo was to simply gain its massive user base.

More than a billion people visit a Yahoo-owned site every month, and Verizon was hoping to use that to sell targeted advertising.

(BBC)