Password Breaches On LinkedIn, Last.fm and Facebook IPO Increase Social Media Sector Growth Questions:
Did they focus on getting ‘big and leave holes in security?
This week a few large sites have had password problems. The social media networking site for professionals, LinkedIn revealed yesterday that over 6 million passwords were compromised. Today Last.fm confirmed its the social media music site also had a password problem with a breach of security.
Another, less social media focused site but well known dating internet company eHarmony is the latest internet property to have security issues and popular sites are taking notice. Password breaches have a negative impact on visitor loyalty, increase bounce rates and make internet investors weary.
Facebook recently went public and a password breach for the largest social media site on the planet with 900 million users would likely cause a national data protection inquiry. We are aware of Facebook users who have complained their Facebook friend count changes sporadically or noticed new friends they never requested.
Social Media stocks are already taking it on the chin with most stocks declining and a popular fund that is a basket of social media companies ticker (SOCL) has been dropping steadily for the past few weeks. Social media sites may be too focused on getting new users and may not be investing in top notch security. If this trend continues, it will be extremely negative not just for social media sites, but for internet startups in general because venture capitalists may stay away to keep their pockets -secure.