Linkedin Corporation (NYSE:LNKD) is facing turmoil this morning as it was reported that 6.5 million of it users passwords had been compromised. The passwords showed up on a Russian hacker site this morning. The news was reported by a Norwegian news website Dagens IT. LinkedIn has yet to respond to the news.
The news comes as a second blow to the security of Linked In’s social networking service. Earlier today it was revealed that the company’s application for Apple Inc. (NASDAQ:AAPL) iOS devices copied full meeting notes and calendar memos and sends them in plain text back to the firm.
That news was revealed earlier today by TheNextWeb.com after they were notified by two computer researchers who discovered the flaw. The two will report their findings at a conference in Israel later on today.
Personal details were not revealed in the leak but security experts have warned that hackers will be able to access the accounts of those whose passwords have been compromised. User data is completely at risk for the 6.5 million people affected.
One of these issues would have been bad for any social networking company to face but two, particularly in one day, could be disastrous for LinkedIn. Despite indications to the contrary, users value their privacy and are very unhappy when their data is mishandled or misused.
Today LinkedIn has been seen guilty of both of those crimes. It is likely to suffer a significant backlash in the coming days as it tries to recover from the blow and patch over the flaws in its security systems and procedures.
Users on LinkedIn are advised to change their passwords and monitor their accounts for any unusual activity. LinkedIn has not yet confirmed the break but it is clear from the Russian site that hundreds of thousands of passwords have been unencrypted so far.
LinkedIn is the leading social network for professionals. It has over 100 million members worldwide in more than 200 different countries. The company went public last year for $45 dollars a share. The company’s stock will open at $93 today.It has a market cap of around $9.6 billion
LinkedIn has been hailed as a success since its IPO as the firm’s stock price has doubled in price and earnings have not disappointed. The company has not yet sufffered to harshly from the failure of Facebook’s IPO but the user backlash from privacy concerns may be enough to do damage to the firm’s value in the eyes of investors.