Hackers attack Microsoft network

SEATTLE -- Hackers have broken into Microsoft's computer network in what the company has described as "a deplorable act of industrial espionage."

The world's biggest computer software company confirmed the electronic break-in on Thursday night, saying it was working with law enforcement authorities to investigate the incident.

"We're still looking into it. We're still trying to figure out how it happened," Microsoft spokesman Rick Miller said. "We will work to protect our intellectual property."

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The break-in was discovered on Wednesday by the software giant's security employees.

They discovered that passwords used to transfer the source code behind Microsoft's software were being sent from the company's computer network in Washington, to an e-mail account in St. Petersburg, Russia, the Wall Street Journal reported.

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The unknown hackers are believed to have had access to the software codes for three months.

The hackers are believed to have accessed Microsoft's system by e-mailing software to the company's network and then opening a so-called back door -- known as a "Trojan" -- through the infected computer.

In hacking terms, a "Trojan" looks like a normal attachment in an e-mail, such as a Word document or picture, but contains a hidden code that can, in effect, take limited control of the recipient's computer.

Computer security experts say the virus involved is called QAZ, which first surfaced in China several months ago.

Raimond Genes, European marketing vice president for Japan-based computer security company Trend Micro, said: "This is very worrying, because we have had detection for it for three months and we regard it only a medium threat."

Once inside, the hacker software can be used to deliver passwords from one computer to another or even destroy files.

Microsoft says it is making sure the hackers cannot use the stolen source code to change commercial software used by businesses, governments and consumers. The risk is said by the company to be remote.

The Wall Street Journal said the unknown hackers were believed to have stolen blueprints to its most valuable software, including latest versions of Windows and Office. Microsoft said it had no information on whether anything was stolen by the hackers.

"We are confident that the integrity of our source code remains secure. There's no evidence that any source code has been modified or corrupted," Miller said.

"As a large corporation we face attacks on our security on a daily basis," a Microsoft spokeswoman in Europe told CNNfn.com, although she admitted it was "very rare" for an Internet intruder to penetrate the firm's defences as deeply as the latest infringement.

While the hackers may not have tampered with the software, anyone getting access to the underlying code might be able to use it to write their own software, or sell the code to other unscrupulous operators.

The hackers could try to blackmail Microsoft into paying to win back the swiped source code -- what industry experts call a "data hostage" ploy.

Microsoft spokesman Miller said attempted break-ins are common at the company, and that the latest incident had prompted it to put in place an "aggressive plan to protect its internal networks."

The Associated Press contributed to this report.

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