Why The Hack Could Be The End Of Ashley Madison

Ashley Madison
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Cheaters are having a bad week.

In case you're not up to speed on the latest scandal to rock the online dating world, here's the gist: a group of hackers calling themselves The Impact Team attacked Ashley Madison and gained access to the site's database of 37 million members. The hackers got hold of financial records, addresses, and other highly sensitive personal information, and have threated to publish it online unless Ashley Madison shuts down.

Avid Life Media, Ashley Madison's parent company, says it has secured its sites and is working with law enforcement agencies to find the parties responsible. Despite their efforts, files containing emails and passwords for some Ashley Madison users have started to spread online.

Some have called this the beginning of the end for Ashley Madison. It's devastating for any website to be hacked, but infinitely more so when it's designed for a philandering clientele whose top priority is privacy. Ashley Madison has failed to uphold one of its most important – perhaps the most important – promises.

And it gets worse. Avid Life Media announced earlier this year that it hopes to raise $200 million in an initial public offering in London in 2015. The brand's value is based almost completely on the service's ability to protect its members' privacy. Without that, is the Ashley Madison worth anything in the first place?

“If a password manager such as LastPass was hacked,” writes Christina Warren for Mashable, “the service would be dead in the water. After all, the whole point of a password management service is to secure and protect your passwords.”

The same principle applies here. Ashley Madison's adulterous target audience is likely to be wary of a site with a history of being hacked. New customers will think twice before joining. Current customers will jump ship. And the IPO? If the hack doesn't squash it completely, it will at least significantly reduce the value of the company.

A renaissance isn't impossible. Other companies have endured disasters, rebranded, and risen from the ashes. It's possible that Ashley Madison could update its security practices, change its name, and come back to reclaim its place in the online dating market.

But should it? Will anyone buy into the narrative that Ashley Madison has seen the error of its ways and reformed? Will cheaters, who require privacy more than anything else, take a chance on a service with such a shoddy track record? The damage may already be irreversible.