Hackers expose flaws at Microsoft and get a look at top-secret codes

  • GENE JOHNSON / Associated Press
  • Friday, October 27, 2000 9:00pm
  • Local News

By GENE JOHNSON

Associated Press

SEATTLE — The FBI has opened an investigation into a break-in by hackers who penetrated Microsoft’s computer system and got a look at a closely guarded and ultravaluable software blueprint.

Microsoft called it an "act of industrial espionage," but said Friday that the hackers gained access to only one source code for software under development, not for its most popular products, such as Windows ME, Windows 2000 and Office.

"That is very good news," spokesman Mark Murray said.

Source codes are blueprints for computer programs, and Microsoft’s codes are the most coveted in the multibillion-dollar industry.

With access to the codes, competitors could write programs that challenge Microsoft’s products. Hackers also could use the codes to identify software flaws, making break-ins and virus-writing easier.

Microsoft said it contacted the FBI late Thursday. Spokesman Steve Berry confirmed the bureau is investigating but refused to discuss details.

No motive for the break-in has been disclosed, but hackers in the past have tried to extort money from companies after stealing information from their computers and threatening to publish it on the Internet. Other hackers have cracked complex computer systems just for the notoriety or the thrill.

Investors did not seem too concerned. Microsoft stock rose $3.25, or 5 percent, to $67.69 on the Nasdaq Stock Market.

The break-in adds to the woes of a company now appealing a federal judge’s ruling ordering that it be broken up for engaging in predatory business practices.

The hackers, whose intrusion was discovered by Microsoft security personnel Wednesday, got a look at a code for a product being designed for release years from now and did not modify it, company spokesman Rick Miller said. He declined to identify the product.

Experts said consumers and businesses should be relieved. Hackers will not be able to analyze and break into Microsoft programs currently on their computer systems, said Simon Perry, vice president of security solutions at Computer Associates in Islandia, N.Y.

But he said the news is still a blow.

"For Microsoft, that’s a significant loss of intellectual property and a significant loss of a competitive edge," Perry said. "What we would expect is that code now either will appear on the Internet or it will be sold off to the highest bidder, probably overseas."

The company’s top executive stressed the seriousness of the break-in.

"They did in fact access the source codes," chief executive Steve Ballmer said during a meeting in Stockholm, Sweden. "You bet this is an issue of great importance."

Earlier, before Microsoft confirmed that its top programs were safe, Miller said the hacking was "a deplorable act of industrial espionage."

The Wall Street Journal, which first reported the story, said Microsoft found that passwords used to transfer source codes were being sent from the company’s computer network in Redmond to an e-mail account in St. Petersburg, Russia. A source familiar with the case told The Associated Press that the hackers had access to the codes for up to five weeks.

The hackers appeared to have accessed Microsoft’s system by e-mailing software, called QAZ Trojan, to the company’s network and then opening a so-called back door through the infected computer, the Journal reported.

A "trojan" is a hacker’s term for a device similar to the Trojan horse of Greek mythology. It looks like a normal attachment in an e-mail, such as a Word document or picture, but contains a hidden code that can take control of the recipient’s computer.

Bruce Schneier, chief technical officer of Counterpane Internet Security Inc. of San Jose, Calif., said the break-in highlights companies’ general lack of network traffic monitoring.

"If you’re not watching your logs 24 hours a day, seven days a week this is the kind of thing that happens," he said. "Microsoft got whacked and it made the news. But this could have happened to anyone."

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Customers enter and exit the Costco on Dec. 2, 2022, in Lake Stevens. (Olivia Vanni / The Herald)
Costco stores could be impacted by looming truck driver strike threat

Truck drivers who deliver groceries and produce to Costco warehouses… Continue reading

Two Washington State ferries pass along the route between Mukilteo and Clinton as scuba divers swim near the shore Sunday, Oct. 22, 2023, in Mukilteo, Washington. (Ryan Berry / The Herald)
Ferry system increases ridership by a half million in 2024

Edmonds-Kingston route remains second-busiest route in the system.

A view of one of the potential locations of the new Aquasox stadium on Monday, Feb. 26, 2024 in Everett, Washington. The site sits between Hewitt Avenue, Broadway, Pacific Avenue and the railroad. (Olivia Vanni / The Herald)
Initial prep work for AquaSox stadium to start, with $200k price tag

The temporary agreement allows some surveying and design work as the city negotiates contracts with designers and builders.

The Joann Fabric and Crafts store at 7601 Evergreen Way, Everett, is one of three stores in Snohomish County that will close as part of the retailer’s larger plan to shutter more than half of its stores nationwide. (Aaron Kennedy / The Herald)
Joann store closure plan includes Everett, Arlington, Lynnwood locations

The retail giant filed a motion in court to close approximately 500 stores in the U.S.

Lynnwood
Lynnwood police: 1 suspect in custody, 1 at large after attempted carjacking

Beverly Elementary School went into a precautionary lockdown Thursday afternoon. Numerous officers continue to search for the second suspect.

Robin Cain with 50 of her marathon medals hanging on a display board she made with her father on Thursday, Jan. 2, 2025 in Lake Stevens, Washington. (Olivia Vanni / The Herald)
Running a marathon is hard. She ran one in every state.

Robin Cain, of Lake Stevens, is one of only a few thousand people to ever achieve the feat.

People line up to grab food at the Everett Recovery Cafe on Wednesday, Dec. 4, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Coffee, meals and compassion are free at the Everett Recovery Cafe

The free, membership-based day center offers free coffee and meals and more importantly, camaraderie and recovery support.

Devani Padron, left, Daisy Ramos perform during dance class at Mari's Place Monday afternoon in Everett on July 13, 2016. (Kevin Clark / The Herald)
Mari’s Place helps children build confidence and design a better future

The Everett-based nonprofit offers free and low-cost classes in art, music, theater and dance for children ages 5 to 14.

The Everett Wastewater Treatment Plant along the Snohomish River on Thursday, June 16, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Everett water, sewer rates could jump 43% by 2028

The rate hikes would pay for improvements to the city’s sewer infrastructure.

The bond funded new track and field at Northshore Middle School on Thursday, Oct. 24, 2024 in Bothell, Washington. (Courtesy of Northshore School District)
Northshore School District bond improvements underway

The $425 million bond is funding new track and field complexes, playgrounds and phase one of two school replacements.

Candidates announce campaigns for Everett city council seat

Ryan Crowther, founder of the Everett Music Initiative, will challenge incumbent Paula Rhyne for the District 2 seat.

Lynnwood City Council Vice President Julieta Crosby speaks during a Lynnwood City Council meeting on Wednesday, Nov. 20, 2024. (Olivia Vanni / The Herald)
Lynnwood picks top eight candidates to replace former council VP

The City Council will make its final decision Feb. 20 after interview process.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.