Ziff-Davis Media has agreed to revamp its website's security and pay affected customers $500 each after lax security exposed the personal data of thousands of subscribers last year.

The settlement, announced Wednesday by New York's attorney general, could spur other online companies to do a better job securing their sites, experts said.

"It used to be enough just to patch security problems, apologize and get on with business. But this case shows that (regulators) are now watching, and if you get burned, you may have a lawsuit on your hands," said Greg Shipley, chief technology officer of Neohapsis, a Chicago-based information security company that assisted the New York authorities on the case.

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