FOSTER CITY, Calif. -- Research experts at FaceTime Security Labs™, the threat research division of IM and greynet security leader FaceTime Communications, today identified and reported a new worm known as W32.pipeline that is propagating over AOL Instant Messenger. The worm delivers an executable file disguised as a JPEG, which in turn calls out to various host computers that download a variety of infection files including rootkits and Trojans that may further propagate the worm through the user’s AIM Buddy List. FaceTime researchers believe that the ultimate goal of the W32.pipeline is to create a sophisticated botnet that can be used for a range of malicious purposes.

Once the user’s PC is infected, it becomes part of a botnet and is under complete control of the hacker to use for a variety of purposes that could include relaying SPAM, performing distributed denial-of-service (DDoS) attacks on other computers or committing financial fraud against online advertisers – commonly called click-fraud. In addition, the potential is high for loss of sensitive personal data stored on the user’s PC.

Like many IM worms, W32.pipeline first appears as an instant message from a familiar contact, luring users into clicking on a link with a contextual phrase. The IM message “hey would it okay if i upload this picture of you to my blog?” downloads a command file called image18.com, which is disguised as a JPEG. Running the file results in csts.exe being created in the user’s system32 folder, part of the Windows operating system.

The infection has the potential to call, via the Internet Relay Chat (IRC) channel, numerous other files that are constantly being updated. Depending on the files downloaded, the infection may create an unwanted service named RPCDB, open up SMTP port 25 (used for email) and attempt to connect to a file upload site. In addition, some files attempt to exploit ADS (alternate data streams). Users may also potentially end up with a rootkit installed on their PC as a result of this chain of infections. Once the user’s PC is infected and under control of the botnet, it can be used to propagate the worm to other users using the same highly refined contextual message, for example "hey is it alright if i put this picture of you on my egallery album? " which will download another command file, again disguised as a JPEG, on additional computers.

FaceTime researchers have noted that this botnet demonstrates much more sophisticated characteristics than any they have seen before, including the ability to authorize only specific IRC clients to log in and manipulate the botnet.

“The emphasis for this latest worm is not so much on the files that are delivered to the users’ computers, but rather on the way these files are deposited onto the system,” said Chris Boyd, director of malware research for FaceTime Security Labs. “Previous IM attacks have tended to focus on the damage done by the files, with little thought on the method of delivery, save for the quickest way to get those files onto a PC. Here, the motivation for the bad guys seems to be in lining up as many ‘install chains’ as possible to insure a consistent pipeline that can be controlled by their rogue botnet.”

FaceTime Communications Inc.