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How Does The Hacker Economy Work?

In This Issue:
1. Editor's Note: Combating The Black Market In Personal Data
2. Today's Top Story
    - How Does The Hacker Economy Work?
    - Related Stories:
    - A Security Researcher Gets Offered The Big Score
    - House Committee Zeroes In On Data Privacy
    - Johns Hopkins Loses Data On 130,000 Patients, Employees
    - Mass. AG Heads Investigation Into T.J. Maxx Security Breach
3. Breaking News
    - Easy Cash? iDefense Offers Reward For Vista/IE 7 Flaws
    - Microsoft's Hotmail Brand Will Live On
    - Google's Dominance Of The Web Isn't A No-Brainer
    - Google Still Plays Catch-Up With eBay
    - Firefox 3 Alpha 2 Released
    - Sun CTO Of Software Bob Brewin Hates 'Web 2.0'
    - Windows Vista Gooses U.S. PC Sales
    - World's First Quantum Computer Set For Debut
    - Virtualization Vendor Warns Mac Users With Vista Dreams
    - Could Canada Kill Net Neutrality?
    - Microsoft Plans 12 Bug Fixes This Week
    - VeriSign Calls Plan 'Biggest Build-Up Of The Internet To Date'
    - Technologists Apply Tools Of The Trade In Search For Jim Gray
4. The Latest Digital Life Blog Posts
    - Using Second Life For Meetings And Collaborations
    - Steve Jobs Takes A Sledgehammer To His Own Monopoly
    - Tech Execs Tee Off With The Pros
5. White Papers
    - The Specter Of Spam
6. Get More Out Of InformationWeek
7. Manage Your Newsletter Subscription

Quote of the day:
"Clarity of mind means clarity of passion, too; this is why a great and clear mind loves ardently and sees distinctly what it loves." -- Blaise Pascal (1623-1662)


1. Editor's Note: Combating The Black Market In Personal Data

Be afraid, be very afraid—but read today's cover story on the hacker economy anyway. It will both fascinate and scare the pants off you at the same time, as it details how our personal identities and financial histories are harvested, dissected in online chop shops, and sold in multipack bundles to anyone willing to fork over a small investment in cash in return for making a big score in hours or days. (If you read nothing else, check out the price list for your personal data.)

The black market in personal identity "body parts" is big business, apparently not that hard to find and pretty easy to exploit. A CNN Special Report that aired in late January titled "How To Rob A Bank" is also pretty scary. You can read the transcript or go to the podcast.

Is there any wonder that a just-completed survey of 181 banks by the trade group America's Community Bankers found that in the past 24 months, 70% said they had to reissue cards because of data breaches three times or more, and 39% said their bank had to reissue cards more than five times. Among debit card issuers, 89% said their customers had been affected by a data breach, compared with 53% of the credit card issuers.

The ACB estimates the average cost of reissuing each debit card is approximately $10 to $20 per card. So a bank reissuing 10,000 cards three times at an average cost of $15 per card would incur a cost of $450,000.

It's those kinds of numbers that are finally making Congress sit up and take notice. As noted in a previous blog, the tide seems to be turning in terms of how the authorities are reacting to the loss and thefts of personal data. For example, the U.S. House Committee on Energy and Commerce last week announced a package of bills designed to protect consumer privacy from a variety of angles—Social Security numbers, phone records, spyware, consumer notification, and data protection.

In the 1967 movie TheGraduate, recent college grad Benjamin Braddock (played by Dustin Hoffman) was told to invest in plastics. Fast-forward four decades, and this year's graduates might well be told to invest in biometrics and implantable RFID chips. I'm not keen on either, but it sure looks like we're headed that way. What do you think? Where is this all going to end? What is the impact going to be on consumer behavior, business intelligence, online purchasing and payment, and overall data security? And what should we doing about it? You can read more about steps individuals can take, and or leave a comment, by clicking here to go to my blog entry.

Patricia Keefe
pkeefe@cmp.com
www.informationweek.com


2. Today's Top Story

How Does The Hacker Economy Work?
It's a murky world of chat rooms, malware factories, and sophisticated phishing schemes. Here's a look inside.

Related Stories:

A Security Researcher Gets Offered The Big Score
For some illegal work, a security researcher could have made big bucks breaking into the Swift network for a hacker gang.

House Committee Zeroes In On Data Privacy
A batch of proposals would protect personal information and strengthen consumer privacy, the bipartisan congressional authors suggest.

Johns Hopkins Loses Data On 130,000 Patients, Employees
An outside contractor lost nine backup tapes that held sensitive personal information on 52,000 workers and 83,000 employees. The data is thought to have been destroyed.

Mass. AG Heads Investigation Into T.J. Maxx Security Breach
The Massachusetts attorney general is leading a probe into the security measures parent company TJX took to protect its consumer-related information from data leaks and hacker attacks.


3. Breaking News

Easy Cash? iDefense Offers Reward For Vista/IE 7 Flaws
The cyberthreat analysis company is paying $8,000 for each submitted vulnerability that allows an attacker to remotely exploit and execute arbitrary code on either Vista or IE 7.

Microsoft's Hotmail Brand Will Live On
Product manager Richard Sim explains why Microsoft ditched plans to adopt the name Windows Live Mail for the service.

Google's Dominance Of The Web Isn't A No-Brainer
But competitors need to be careful not to repeat the mistakes of Gopher and Veronica, search expert Susan Feldman says.

Google Still Plays Catch-Up With eBay
Traffic figures for the competing e-commerce sites are on opposite ends of the spectrum, according to an Internet metrics company.

Firefox 3 Alpha 2 Released
The browser-in-progress is intended for Web developer testing and not for general use.

Sun CTO Of Software Bob Brewin Hates 'Web 2.0'
The man in charge of improving the developer experience at Sun says he's totally behind the concept of new software models. Also, what about "S Bridge"...?

Windows Vista Gooses U.S. PC Sales
The sales spike may have been driven more by tech-savvy early adopters than by everyday consumers.

World's First Quantum Computer Set For Debut
D-Wave Systems next week will demonstrate the world's first commercial quantum computer, a supercooled, superconducting niobium chip housing an array of 16 quantum bits.

Virtualization Vendor Warns Mac Users With Vista Dreams
Parallels says the licensing agreement makes it uncertain whether its customers will hear from Microsoft's legal department in the future.

Could Canada Kill Net Neutrality?
Advisers to the minister of industry seem to favor telecommunications companies' arguments in favor of a two-tier Internet system, according to reports.

Microsoft Plans 12 Bug Fixes This Week
At least four of the pending updates are being called critical.

VeriSign Calls Plan 'Biggest Build-Up Of The Internet To Date'
The company wants to expand the capacity of the global Internet infrastructure by 10 times by 2010, enabling it to handle 4 trillion queries a day.

Technologists Apply Tools Of The Trade In Search For Jim Gray
Volunteers use satellite imaging and ocean surface modeling in their quest to find Microsoft's missing database guru.

All Our Latest News


----- The latest research, polls, and tools -----

Server Virtualization
Companies are gradually adopting server virtualization in the data center. Why are they making this shift? Examine how more than 250 firms plan to adopt server virtualization technology in this recent InformationWeek Research report, Server Virtualization.

SMBs: Register Today For The Small Biz Resource Newsletter
Every Tuesday and Thursday we give you the lowdown on the small-business climate—tools, tips, dollars, and sense—and the latest on the products and services you need to run your small business or home office more efficiently. Dig in to business tips, technology tricks, and money-saving pointers from small -office and home-office experts. And stay current with developments that could affect the way you do business, with news from around CMP and across the Web—peppered, on occasion, with our personal observations.

-----------------------------------------


4. The Latest Digital Life Blog Posts:
http://www.informationweek.com/blog/digitallife/

Using Second Life For Meetings And Collaborations
I admit I was skeptical at first about whether it made any sense to hold meetings in Second Life. Getting together a bunch of avatars to discuss real-life business issues seemed just plain silly. I would have said adding Second Life to a meeting added distractions and brought nothing useful. However, recent conversations with IBM and with an executive at a SL consulting firm have given me some things to think about with regard to the value of meeting in virtual reality.

Steve Jobs Takes A Sledgehammer To His Own Monopoly
Apple CEO Steve Jobs struck a blow against his own company's monopoly Tuesday, by issuing a public challenge to media companies to start selling their wares without any digital rights management at all.

Tech Execs Tee Off With The Pros
Which of these Internet luminaries has the best golf handicap: Chief Yahoo Jerry Yang, Sun Microsystems chairman Scott McNealy, or software entrepreneur Tom Seibel?


5. White Papers

The Specter Of Spam: Free Your Business And Boost Your Bottom Line
This MessageLabs white paper summarizes current small-business spam threats, including disturbing trends you should be aware of and take seriously. It also underlines the advantages of an outsourced solution to messaging security and the bottom-line benefits for your business.


6. Get More Out Of InformationWeek

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