The blasé outnumbered the rudely shocked Tuesday morning, a day after the email accounts of some 50 million Hotmail subscribers were laid bare to the world.
The dwindling few who believed Net-based email was a secure proposition are doubtless feeling exposed after some crackers exploited a huge hole in the free service – even after Microsoft finally plugged it later on Monday.
Also:
Hotmail Hackers: 'We Did It'
Hotmail Accounts Exposed to All
Want Security? Forget Web Mail
Did MS Dig Its Hotmail Hole?- - - - - -
What will the fallout be on the Microsoft end? Likely not much, said business analysts, lawyers, and even some Hotmail users.
Analysts quickly dismissed the security gaffe as little more than a public relations headache for Microsoft.
While the company may be a big player in online services, its towering market cap is built on the solid-gold foundation of software sales, not free email.
"Microsoft is into so many things," said Frederick Dickson, an analyst at brokerage firm Branch Cabell. "This is one very small aspect of their overall business."
After the news broke Monday, Microsoft's stock dipped just 1 percent, considerably less than most of its tech-stock kin on a down day for the Nasdaq.
In the long term, it's harder to quantify the costs to lost privacy and trust among Microsoft customers, analysts said.
"Online services is an area where they want to go head to head with AOL," said Steve Shepich, an analyst with Olde Discount Brokers. "Email is a major part of what they have to offer, and new users might be hesitant to [switch over] if the email is not secure."
Still, skittish users are just as likely to get burned at any other Web email service, experts said.
"They're inherently insecure," says Peter Neumann, a researcher at SRI International who keynoted last week's Usenix security conference. "To single this one out and say that it's unsafe is unfair to everything else that's unsafe."
Indeed, some current Hotmail users, while irked by the breach, seem to believe they're better off sticking with Microsoft's service than heading elsewhere.
"I'll continue to use it, because I imagine they'll fix this problem straight away," said Chas Warren, a 38-year old former webmaster. "If one [service] can be hacked, so can the others."
Nevertheless, Warren said he was shocked by the extent of the breach and expects it will be a while before he uses Hotmail to send anything confidential.
Ditto, said Lydia Sharp, a 25-year-old Web industry professional in Atlanta. "I'd still use it for real trivial stuff. I wouldn't use for it invoices or anything."
Other free email providers acknowledged that security is a big issue but weren't too keen to talk about how they'd prevent similar breaches.
"Obviously, this is something important to any Net-based email service," said a Yahoo spokesman, referring to Yahoo Mail. "We don't discuss security measures because they're security measures. To our knowledge, we've never had a problem like this before."
Those who did use Hotmail for sensitive stuff and got burned will have an awfully hard time seeking legal redress from Microsoft. In its terms of service agreement for Hotmail, Microsoft clearly states it's not liable for unauthorized access to users' data.
While that doesn't offer carte blanche protection against litigation, it raises the bar to nosebleed height, lawyers said.
In the end, the biggest impact of the incident may be to alert the slumbering masses that Net privacy is a big-time issue.
"This is a wake-up call for the industry," Marc Rotenberg, executive director of the Electronic Privacy Information Center.
"A privacy meltdown with Hotmail is a reminder that privacy issues are only going to get more serious," Rotenberg said. "A lot of people are trying to decide if privacy is going to get more important online – I think 50 million users of Hotmail are going to have a pretty strong opinion about that today."
Yup.
"I feel like I've been bent over the table by hackers, had my pants lowered to my ankles, and Vaseline smeared all over my [expletive] while the great staff of Hotmail tied my hands together with a sturdy piece of rope," wrote a Hotmail user who was afraid messages with his credit card number had been exposed.
