Somewhere, at an unknown location in downtown Atlanta, a stealth-mode startup company is listening in on bot conversations -- and developing a method to disrupt them.

Damballa, a new venture spun off from research conducted at Georgia Institute of Technology, is working on products that can recognize the online transmissions used to form botnets, according to reports. The technology is currently being delivered only to government agencies, but a commercial offering may eventually be in the cards, investors say.

Named after a powerful voodoo snake god, the startup received $2.5 million in Series A funding in June from several venture capital companies, including Sigma Partners, Noro-Moseley Partners, and Imlay Investments.

The company is being built on the research conducted by Merrick Furst, an associate dean at Georgia Tech's College of Computing and a widely-recognized researcher on bot behavior. Furst, who is president of the new company, worked with Wenke Lee, an associate professor in the same department, and David Dagon, another well-known bot expert who is also affiliated with Georgia Tech. The founders named a CEO earlier this year: Steve Linowes, who co-founded Web access software developer Encompass Inc. in 1999 and later sold it to Yahoo! Inc.

Neither Furst nor Linowes would agree to an interview, citing the company's stealth-mode status. The company's Website contains nothing except a phone number. The venture capital companies announced the investment in June but will not divulge any details on Damballa's technology or product rollout schedule.

Nonetheless, some details have emerged that point to what Damballa is up to. In an interview with Red Herring in January, Furst noted the rapid rise in bot armies and suggested that about 80 percent of spam is created by botnets. More than 250,000 new machines are conscripted each day, he said.

"We [Damballa] have taken a nonconventional approach," Furst said in the interview. "We studied how these bot armies communicate with each other and the patterns they have. We have been monitoring networks so we can pick up the formation of these armies. Imagine if you could listen in on all the interactions that computers are having and recognize that some of those are about forming a bot army.

"Our customer right now is the government, which is worried because these bots can be direct threats against infrastructure," Merrick continued. "[Botnets] can be used to take out cellular networks through distributed SMS attacks and used to direct anonymous threats."

Newspaper reports indicate that the spin-off will be headquartered in Atlanta, though the company still hasn't published a street address. A telephone operator said no listing for the company is available.

— Tim Wilson, Site Editor, Dark Reading

Damballa Inc.