Thursday, 30 October 2008

The economics of Scareware

Earlier this month Microsoft and the Washington State Attorney General launched a crusade on Scareware, the pop-ups that are installed on a customer's PC (usually as part of them being consumed into a botnet) and won't go away until they purchase the software.

Now information obtained by a hacker shows just how lucrative it is. A Russian company's Scareware software that masqueraded as Anti Virus software priced at USD$49.95 a time has apparently made clandestine operator Bakasoftware USD$5m per year in profit.

The software is distributed via botnets - with the intermediaries making anything from 58% to 90% of the commission on the sales depending on volumes, according to the security researcher who discovered the information on the web.