Lavasoft News - March 2007

Editorial graphic Good things come to those who wait. And we know all you allegiant Ad-Aware users have been waiting patiently to get your hands on our new product. Well, the wait is over. The public beta test for Ad-Aware 2007 is set for this month and in this issue of Lavasoft News we give you details on where and how to sign up. Plus find out what makes this new-and-improved Ad-Aware worth waiting for-see a full feature list. Also in this issue: those brutal botnets, that mighty MySpace and one of the biggest online scams ever. A must read...

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News from Lavasoft

Ad-Aware 2007 Beta and Beyond
With the release of Ad-Aware 2007's public beta just around the corner, we wanted to give you, our loyal Lavasoft News readers, the inside scoop on the upcoming beta and the final product.

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Battling the Botnet Pandemic
The malicious worldwide web of hackers and cyber-criminals are taking control of computers, leaving the Internet open to widespread attack and fraud. Experts agree that a solution to the growing botnet problem must be found if there is to be any future for the Web.

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MySpace's Adventures in Cyberspace
The wildly popular social networking website MySpace is on the verge of pushing out web favorites like Google and Yahoo to top web surfer's charts. For all its success, MySpace has come up against its share of mishaps, miscreants, and malware. Discover the good, the bad, and the ugly sides of this growing cultural phenomenon.

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Swedish Bank Falls Prey to Internet Fraud
Swedish bank Nordea is trying to track down the phishing gangs who stole more than 8 million kronor ($1.1 million U.S.) from its customers in what is thought to be the biggest online fraud ever.

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Vista Vulnerabilities
Vista, the much-anticipated and long-awaited successor to Windows XP, has been a subject of controversy in the security industry long before it was released to the public. Now, following its release, the security spotlight continues.

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Security Shorts
Lavasoft News has compiled a list of "security shorts" - summaries of other online security stories making news around the world this past month.

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Spyware Newsbits

New Targets in Detection (February 2007)
Protect your privacy with a complete list of new targets for February 2007.

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Lavasoft Blog
If you want to go behind the walls of Lavasoft, hear what we are up to, what we are thinking and what is happening in the industry, the Lavasoft Company Blog is the place to go for regular, up-to-date information.

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The Arrival of Ad-Aware 2007 - Beta and Beyond

There is a saying that if you build it they will come. So true.

Lavasoft developers have not yet finished "building" Ad-Aware 2007, but thousands are already lining up to test it.

After posting a blog on the Lavasoft website and starting a thread in the support forums calling on testers to join the Ad-Aware 2007 public beta, we now have 94,127 beta testers and counting.

You can still join our ever-growing team of beta testers and be a part of creating the final product trusted by hundreds of millions of computer users around the world. Simply visit the Lavasoft Security Center and register.

There are no special requirements to be a beta tester; however Ad-Aware 2007 does not support Windows 98 or ME. We are looking for both experienced Ad-Aware users and newbies who may be seeing the product for the first time.

Ad-Aware 2007 will be available for download and testing in March.

"We are looking forward to getting feedback from our public beta testers as we put the finishing touches on the product," says Lavasoft Director of Development, Lennart Lundqvist. "This product has evolved greatly from SE and that is thanks to the suggestions and ideas of our committed users. Their opinions are key to the development of Ad-Aware 2007 and to future Lavasoft products."

Lundqvist's development team has completely re-designed the engine of Ad-Aware, which is more powerful and efficient, delivering one of the fastest scans on the market without clogging up the PC's resources.

Other features of the new-and-improved Ad-Aware include:

  • Advanced Code Sequence Identity technology. Our improved CSI technology detects even more malware that is deeply embedded in your system and keeps you protected from the latest threat variants.
  • Enhanced Detection Database. Incremental updates ensure a quick download from our comprehensive threat database, again freeing up your most valuable computer resources.
  • New graphical user interface (GUI). The fresh, new look of our straightforward GUI means easy navigation through all of Ad-Aware 2007's advanced protection options.
  • Automatic scans and Web updates. Set a personalized schedule for automatic scans and Definition File updates, letting Ad-Aware do the work for you according to your schedule and preferences. You'll never miss an update from the Detection Database again.
  • Ad-Watch TrackSweep. The new TrackSweep feature clears browser cache, cookies, and history that are left behind while you surf the Internet on IE, Firefox and Opera, all in one easy click of a button.
  • Ad-Watch Connect. The real-time monitoring of Ad-Watch is expanded to include an additional shield against hijackers and identify theft by preventing private information from leaving your computer.
  • Hosts File Editor. This new tool gives you the power to add, delete or make changes to the Hosts File to block advertisement sites, reverse browser hijack entries, create navigational shortcuts, and assist with parental controls.
  • Multiple Browser Support. Ad-Aware 2007 supports Internet Explorer, Firefox and Opera - so now you can use the web browser of your choice.
  • System Restore Point. Ad-Aware 2007's conveniently located system restore point means you never have to worry about accidentally deleting a file during cleanup.

Ad-Aware 2007's beta phase is expected to last several weeks with the official commercial release of the product set for later this spring.

The final product will be released in three different versions: Ad-Aware 2007 Free (formerly known as Personal), Ad-Aware 2007 Plus, and Ad-Aware 2007 Pro. An updated version of Enterprise will be available later this year.

Those with a valid Ad-Aware SE license will be eligible for an update to our new product, completely free of charge.

Stay tuned to future issues of Lavasoft News and to our company blog, updated regularly, for more information on Ad-Aware 2007 as it becomes available.

Battling the Botnet Pandemic

Your home computer may be among the millions of PCs that are under the control of criminals, and worse yet, you may not even be aware of it.

Botnets, networks of compromised computers that hackers have commandeered, are one of the most serious and uncontrolled Internet problems of 2007, with experts warning that their rampant rule puts the Internet's future in danger.

Between 100 million and 150 million of the 600 million PCs on the Internet are under the control of hackers, estimated Vint Cerf, known as one of the "fathers of the Internet." In a panel discussion on the future of the Internet at January's World Economic Forum, Cerf, who co-developed the TCP/IP protocol that is at the base of Internet traffic, equated the spread of botnets to a disease that has reached a "pandemic" scope.

While most everyday computer users may be unaware of botnets, their effects show up all over the Net. Botnets are part of the multilayered and profitable crimeware industry, where the initial step is to infect and take control of a targeted computer.

"Computer users are often lured into installing software that they think is necessary for a download, and unknowingly install malicious software at the same time," says Christopher Allansson, Manager of the Lavasoft Security Center.

With the number of infected computers on the rise and no clear solution in sight, botnets threaten the cyber-world with real-life results.

Bot herders, the hackers who control botnets, can instruct thousands of computers to follow their orders, whether it's to propagate spam messages, launch fraud schemes or to issue denial of service attacks, targeting certain, often high-profile, websites in order to make them unavailable to users.

Once bot herders compile a group of compromised machines, they can sell it to fraudsters who are then capable of using the exploited machines for identity and data theft. An exploit can be sold for anywhere from $200 to $50,000 US dollars, Chad Harrington of FireEye told CIO Today.

The Internet's structure and resiliency has allowed it to keep functioning, in spite of attacks against it.

One of the most significant assaults on the Net, the February 7 distributed denial of service attack against domain name system (DNS) servers that manage global computer traffic, appears to have been the work of a botnet, experts say. At least two of the 13 DNS root servers were briefly overwhelmed, but Internet service was not disrupted.

Even with its known stability, researchers say an answer to the botnet problem must be found in order for the Web to survive. Improved operating system security and user authentication may help to alleviate the botnet threat, but neither is a failsafe solution.

The future may even see "disposable virtual PCs," accessed through the Internet, to cut down on the threat of virus infection, Michael Dell, the founder of Dell computers, said.

Whatever the solution, it is likely to take a coordinated effort to get the problem under control. According to Hamadoun Toure, secretary general of the International Telecommunications Union and panellist at the World Economic Forum, the botnet fight is a "war" that can only be won by cooperation between regulators, governments, security firms, telecom providers, and computer users.

"A step computer users should take, along with keeping their anti-virus and anti-spyware software up-to-date, is to always be aware of what they are downloading," Allanson said. "You should never install software if you are unsure of the vendor. If you have doubts, submit suspicious files to a free scanner service like for an analysis."

MySpace's Adventures in CyberSpace

Since its launch in 2003, MySpace has grown to become the most popular social networking site on the web, boasting over 100 million accounts and 325,000 new registrants daily.

MySpace, owned by Intermix Media, is now in the hands of Rupert Murdoch's News Corporation, after being sold for 580 million U.S. in July 2005. Then the fifth most viewed Internet domain in the U.S., MySpace has become the third most popular site on the web, even topping the charts on some weeks, according to Alexa Internet.

And from the look of it, MySpace's growth will not be slowing down anytime soon.

News Corp. hopes to more than double the number of countries it serves by the year's end, to reach its target of operating in 11 markets, according to Reuters. MySpace operates in the U.S., the U.K., Ireland, Australia, France, Germany and Japan, has test-launched services in Mexico, Italy, and Spain, and is finalizing a deal to launch a version in China.

MySpace's influence has begun to move even beyond PCs as mobile operators make the move to offer social networking services to their customers. According to reports at the start of February, mobile phone carrier Vodafone agreed to offer MySpace to its European subscribers, following a similar deal last year with the U.S. carrier Cingular Wireless.

As much as the site is loved for its dating, friendship, and professional networking ability, it is criticized in equal measure for its use by cyber-criminals and online predators.

As expected with any site of its size that has messaging, file sharing, and blog capabilities, online threats of all shapes and sizes have flooded MySpace.

One of the most notable attacks occurred last summer, when a banner ad that was seen on MySpace, as well as other sites, used a Windows security flaw to reportedly infect over a million computer users with spyware.

Even with MySpace's reported move to a more aggressive stance on phishing and spam, both are among online scourges members contend with. In January, a scam site mimicking the look of MySpace's log-in page succeeded in stealing the passwords of almost 60,000 members.

MySpace has gone forward with two civil action lawsuits in which the site's members were exploited.

So far this year, MySpace has sued Scott Richter, once accused of being one of the world's top three spammers, for using stolen passwords to access profiles and send spam bulletins. Samy Kamkar was also sentenced to three years of probation, for unleashing a self-propagating cross-site scripting worm on the site.

Security measures for children and teens logging-in to the site have also been heavily criticized by family protection groups.

"The ease with which anyone of any age can create a page, upload photos, share deeply personal details of their lives, and make new "friends" quickly turned MySpace into a one-stop shopping mall for online predators," wrote Dan Tynan in a recent PC World article that put MySpace at the top of a wrap-up of "The 25 Worst Web Sites."

In the latest legal action, four American families have filed separate suits against MySpace and News Corp., under allegations that their teenage daughters were victims of sexual predators that solicited them on the service.

In a ruling that may be influential in the outcome of the remaining cases, a federal court in mid-February dismissed a negligence lawsuit filed by the family of one of the teenagers, reaching a decision on the grounds that as an "interactive site," MySpace is protected from material posted on it.

MySpace is taking steps to protect its underage users by attempting to make its site more parent-friendly and safety oriented. It recently came out with the news that "Zephyr," a free software tool to alert parents of the username, age, and location their child lists on their personal profile, is under development.

It has also announced two new privacy safety features - e-mail verification at sign-up and a tool to prevent any members under 18 years of age from being contacted by adults. And in January, it teamed up with the National Center for Missing & Exploited Children to distribute Amber alerts, community notifications of missing children, online to its members.

For more information on how to stay safe on MySpace, the site has its own Safety Tips and Tips for Parents.

Swedish Bank Falls Prey to Internet Fraud

Security experts are calling on Nordea, the largest bank in the Nordic nations, to shape up or ship out its online banking system after 250 customers had cash siphoned from their accounts.

The phishing attacks started in September of last year, disguised as e-mails from the bank. Victims were duped into downloading anti-spam software, which was really a log-in/password-stealing Trojan.

As soon as the user navigated to the Nordea log-in page, the Trojan would kick into gear, saving the customer's details. An error message would then be displayed asking them to resend the information. The criminals then had the two access codes needed to steal cash from the accounts.

Police tracked the fraudulent e-mails to computer servers first in the U.S. and then to Russia. More than 120 people are suspected to be involved in what police say is the work of organized crime gangs in Russia. Two people have already been convicted, two others were recently arrested, and warrants have been issued for seven more.

A reporter at Computer Sweden magazine actually met the Russian-speaking hacker behind the Trojan attack in an anonymous Internet chat. The reporter claimed to be interested in buying his own Trojan tailored for attacking an Internet bank. The hacker, called Corpse, admitted he designed Haxdoor, the Trojan used in Nordea's case and was looking to sell the version for $3,000 U.S.

Just days later, Corpse's site, where he sold his Trojan program, was shut down.

In the meantime, Nordea is feeling the pressure to make some changes to its Internet system.

"Like we have said for a long time, we are carefully looking at different solutions," said Nordea spokesperson Boo Ehlin. "We are continuing to use the system we have had in place for a long time. We are constantly making small adjustments, but if major changes are made we will go public when we make a decision."

Nordea customers log in to their accounts using their date-of-birth, a four-digit security code and a one-time code. Some security experts have rated the system as the least secure of any Swedish bank.

The bank has been the target of phishing e-mails before. In August 2005, it was forced to temporarily shut down its online arm due to another sophisticated phishing attack.

Nordea has fully compensated its customers targeted in the latest attack.

Vista Vulnerabilities

Vista, pegged by Windows as their most secure operating system yet, has been under the scrutiny of many in the security industry even before it hit the market.

Only a month after its commercial release, researchers are raising specific concerns about the new operating system's security.

On the heels of Microsoft's latest Patch Tuesday, which included the first fix that will involve Vista (a critical flaw in the Microsoft Malware Protection Engine that affects the Windows Defender security package), new security holes are now being questioned.

According to reports, Security Researcher Joanna Rutkowska claims to have found a "gaping hole" in Vista's User Account Control (UAC) security functionality.

As one of its security features, Vista runs in a normal user account by default and pops-up dialogue boxes before it performs administrative functions, like modifying system files. The concern raised is over the Vista assumption that all application installers should be run with administrative privileges.

When users attempt to install a new program, they must choose to give the installer complete system privileges or not run the program; when an installer is run as administrator, it has access to the file system and registry. Rutkowska has pointed out several security problems this opens up.

A blog response from a Microsoft security manager stated that accommodations had been made to consider both security and usability in Vista, and that it was not a matter of "security bugs."

Rutkowska does not seem to believe that explanation answers the security questions that have been brought up. "If Microsoft won't change their attitude soon, then in a couple of months the security of Vista (from the typical malware's point of view) will be equal to the security of current XP systems (which means, not too impressive)," a statement on her blog said.

The trend of malware writers to target widely used Microsoft applications and services could mean more threats are in store in Vista's future as more and more users switch to the operating system.

"Malware authors continue to find unknown or unpatched vulnerabilities in popular applications and services which are then used in zero-day attacks," Dave Marcus, security researcher and communications manager at McAfee, told

This tendency highlights the need to use third party software as an additional security measure in place to protect yourself from malware. In order to support your need to control what products secure your computer and protect your privacy, Lavasoft has made sure that Ad-Aware 2007 will be Vista compatible and Vista certified.

Security Shorts

Groundbreaking Settlements Help in Adware Fight

For the first time ever, law enforcement officials in the state of New York have held advertisers responsible for ads displayed through adware. Cingular Wireless, and settled with the Attorney General, agreeing to pay fines and take steps to help keep adware off users' PCs, however they did not admit guilt in the case. The three companies spent hundreds of thousands of dollars delivering ads through Direct Revenue LLC.

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German Police Banned from Using Spyware

In a landmark decision, German's High Court ruled that police are banned from installing spyware on suspected criminals' computers without their knowledge. The nation's Interior Minister had planned to give the federal police more power in monitoring suspected terrorists and others by allowing them to spy on their PCs. But the High Court argued that searching computers is similar to searching homes and requires the suspect be notified.

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Jail Time for British Privacy Violators

UK courts plan to start jailing people found guilty of trading or misusing the personal data of others. The British government has been under increasing pressure to institute harsher penalties as the small fines in the Data Protection Act have not deterred personal data thieves. Offenders could face up to two years in prison.

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U.S. Senate Introduces New Privacy Bill

The U.S. is also taking steps to better protect peoples' personal information. The Senate has introduced a bill called the Personal Data Privacy and Security Act that includes tougher criminal penalties for ID theft. New stats from the Privacy Rights Clearing House say that more than 100 million records containing personal data have been subject to a security breach since February 2005.

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Internet Use in China to Surpass U.S.

More than 10 percent of China's population is now online - 137 million people. The China Internet Network Information Center, a state-run think-tank, says that is an increase of 23 percent from a year earlier. With an estimated 210 million Americans using the Internet, China is set to surpass the States in the next few years if it keeps up this annual growth rate.

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IT Hiccups Expected When Clocks Change

A federal policy signed into law in 2005, requiring the start of Daylight Savings Time in the U.S. to be moved from the first Sunday in April to the second Sunday in March, is expected to cause problems for IT infrastructure. The idea to also delay the return of standard time in the fall by a week was to save on energy use. But for IT, that means every software and hardware system relying on time-stamps needs to be checked and tested.

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Ad-Aware SE + Firewall - 30% off! Buy Ad-Aware SE + Lavasoft Personal Firewall bundle today and get up to 30% off! *Offers ends March 15th, 2007. All purchases will be eligible for a free update to Ad-Aware 2007
One of the so-called "fathers of the Internet" claims 100-150 million of the 600 million online computers are virus-infected components in botnet networks of PCs under control of hackers. Read who said it and what other predictions he makes in our story, "Battling the Botnet Pandemic."
Term of the Month
Botnet, shortened from roBOT NETwork, is a network of compromised PCs. It is a type of Remote Control Software, specifically a collection of software robots, or 'bots', which run autonomously. Botnets have been used for sending spam remotely, installing more spyware without consent, and for other illicit purposes.

Educate yourself by reading more terms in our Spyware Glossary.
Tech Tips
Having up-to-date firewall, anti-virus and anti-spyware programs is key in keeping your computer safe, but be prepared in the event of a system crash. Back up your files! Along with confidential documents, think of all those personal photos you may have stored on your PC. Don't lose them! Copy them onto a removable disc and store them in a safe place. It may seem like simple advice, but many computer users don't have any back ups at all.
Letters to the Editor
Many of you who wrote to us feel the so-called "spyware" teacher shouldn't be put behind bars and that malware is the real criminal in this case. Stay tuned to this story as sentencing is handed down March 2. In the meantime, read a few of your letters here (some have been shortened due to space limitations).
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