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Competition May Be Driving Surge in Botnets, Spam

Market challenge from Nugache botnet may be pushing Storm's operators to expand, researcher says

A price war may be at least partially responsible for the recent increase in spam and botnet activity on the Internet, a researcher suggested this week.

The operators of Nugache, one of the Web's most sophisticated emerging botnets, appear to be expanding their network and slashing prices to customers who want to use it to distribute spam, according to researcher Paul Henry, vice president of technology evangelism at Secure Computing Corp. (Nasdaq: SCUR).

"We have seen offers that will allow a customer to send a million emails for under $100," Henry says. "If you send more than 10 million, the price drops to under $80 per million. There's a price war going on, and Nugache is becoming the bargain basement."

The new low prices may be partly driving the recent increase in foreign-language spam that many users have been finding in their filters and emailboxes over the past few weeks, Henry suggests. Recent reports indicate that spam comprises more than 95 percent of all email. (See Spam Reaching Record Volumes, Researchers Say.)

"One of the major differences between Storm and Nugache is that Storm appears to do a much better job of matching the language of the message with the recipient," he says. "If you look at the foreign language spam you're getting, the characteristics are not the same as the spam that comes from Storm. A lot of this is coming from Nugache."

However, it is possible that Storm's recent resurgence is partly fueled by its operators' desire to compete with Nugache, Henry suggests. Storm may be expanding its footprint -- and its operators may have cut their usage prices -- in order to meet the new competition, he says. (See Storm Darkens Christmas, Takes Aim at New Year's.)

"One of the common characteristics we're seeing in botnets is that they're not only looking to expand, but they're looking for ways to hold onto the [zombies] that they already have," Henry notes. "They'll do anything to avoid being detected by antivirus or other signature-based tools.

"We've actually seen some [botnets] installing a hacked version of the Clam AV software, so that the end station will show up as being protected by AV [thus avoiding removal from the botnet], but won't be able to detect the botnet itself. In other cases, the botnet will actually patch new vulnerabilities on the client, so that [the client] won't be red-flagged and taken off the botnet."

Aside from price, the botnets are likely competing on the basis of size and reach. It's difficult to estimate Nugache's size, because it uses a peer-to-peer architecture that doesn't require a command-and-control system and employs fast flux technology that allows its devices to change IP addresses every 300 seconds, Henry says.

But even though its exact size isn't known, it seems clear that Nugache is large enough to compete with Storm, Henry says.

Although it is at least six months older than Storm and has been slower to grow, Nugache operates in much the same way as Storm, spreading like a worm, evolving and repacking itself to avoid signature-based defenses, and functioning without a static command and control system. Enterprises will generally use the same defenses to fight both botnets, Henry says.

"The one thing that the threat of another bot might do is accelerate enterprises' decisions to move forward with more effective tools than the signature-based products they're currently using," Henry says. "Clearly, those tools aren't much use against these types of botnets."

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