Selling malware is becoming a real business, complete with advertising, marketing, and service after the sale, a university researcher reported this weekend.

Speaking at DefCon 2007, Thomas Holt revealed the results of his study, "The Market for Malware." The study reflects research conducted over the last year on some 30 hacker forums and focuses on six of those forums, including those hosted in eastern Europe.

"The idea was to go into the forums and find out how they work," says Holt, who is an assistant professor in the criminal justice department at the University of North Carolina-Charlotte. The study was conducted in conjunction with the university's information systems department, which operates a honeynet that helped the researchers find and join the forums.

The average hackers' forum works much like a combination of eBay and a department store site, Holt reports. Many are divided into areas of interest -- such as programming, scripting, Mac, or Linux -- and there usually is some sort of buying area where shoppers can purchase tools or exploits, such as bots or credit card data collectors.

"The discussion threads act as an advertising tool," Holt says. "If a hacker finds a new bot, they can provide information about it, and give a general sense of pricing as well as how to contact them. Then they can take questions from potential buyers on what they're selling."

But as with eBay or other consumer-to-consumer auction sites, there is a method for building a seller's reputation in hacker forums. "Typically, there is an administrator or volunteer testers whose job it is to take the executable code and find out if it really works," Holt says. "Then, after the sale, there is usually a method to provide positive or negative feedback on the exploit -- whether it works, and how well."

As sellers submit more workable exploits to testers and buyers, they build a reputation that makes it easier -- and more lucrative -- to sell their future exploits, Holt says. Sellers who distribute old vulnerabilities, non-working vulnerabilities, or fail to deliver anything are labeled as "rippers" (i.e., rip-off artists), who are often chastised and thrown out of the forums.

"It appears that in this case, there is honor among thieves," Holt says.

A typical exploit in a hacker forum can sell from less than $100 to more than $3,000, Holt says. "A lot depends on how new, or really innovative it is," he says. "Sometimes a buyer will acquire an exploit, reverse-engineer it, and then give it away for free. That can suck the value out of it."

Some hackers will even hire a third party to do the advertising and sales on their behalf, Holt says, and some will give a discount to repeat customers, as is done in any business. Customers can also choose different payment options -- such as paying via Western Union -- for an additional fee. Recently, some hackers have begun selling easy-to-remember ICQ numbers -- the preferred method for communicating anonymously in the forums -- just as a business might sell an easy-to-remember phone number or URL, he says.

And although it can be risky, some hackers have begun to offer post-sale services -- or even subscription services -- that allow them to work with customers over a period of time. "We have seen spam or DOS services sold for $25 to $100 an hour," Holt says. "And for buyers who aren't particularly tech-savvy, some exploits now come with some post-sale services, where the hacker will help them with implementation, or customize the exploit to fit exactly what the customer wants."

Hacker marketplaces seldom stay up for long, because their operators fear detection, but they reappear elsewhere in much the same format, Holt says. "They might be taken down by an ISP or law enforcement, but if they aren't, they'll be up for a couple of months and then they'll be offline for a couple of months."

Many hackers sell their exploits in several different forums, and it is possible to build a reputation by listing and selling in a variety of marketplaces, Holt says. But there is competition between forums as well -- there have been instances in which marketplaces hacked each other, or attempted to discredit each other, Holt says.

Holt and his research team are about to embark on further study in which they will attempt to study the international market for exploits, and how the products themselves evolve as they are bought and sold. "We'll talk about that next year, probably at DefCon or Black Hat."

— Tim Wilson, Site Editor, Dark Reading