Security researchers have warned of a new virus disguised as a download of Internet Explorer 7 Beta 2.
They said the virus was unusual for a couple of reasons: the email includes a convincing graphic that looks like it could really be from Microsoft, and the virus is delivered when recipients click on a link rather than in an attachment, which makes it harder to stop it from reaching in-boxes.

"The idea of sending a link seems to be a trend among attackers; it's still fairly new and it works much better than sending a file," said Mikko Hypponen, chief research officer at F-Secure.

The e-mails carry the subject line "Internet Explorer 7 Downloads" and appear to come from [email protected] They include a blue, Microsoft-style graphic offering a download of IE 7 beta 2. Clicking the graphic will download an executable file called IE 7.exe.

The file is actually a new virus called Virus.Win32.Grum.A, and security experts are still analysing it to see what it does. Sophos said it can spread by e-mailing itself to contacts in a user's address book. The virus tampers with registry files to ensure it gets installed, and it tries to download additional files from the Internet, said Graham Cluley, a senior technology consultant for Sophos.

Other specifics were unknown yet, but such viruses often install a keystroke logger to steal personal information, and establish a network of infected computers to launch a denial of service attack, Cluley said.

"We don't know anything yet about where it is coming from," Hypponen said. "It's fairly well made and hard to analyse with normal tools."

F-Secure had received many reports of the e-mail but few submissions of the virus itself, indicating that damage so far is limited. Cluely agreed: "I wouldn't classify this as one of the biggest viruses of the year, but that doesn't mean it isn't a threat" he said.

Detection of Win32.Grum by anti-virus programs was "mediocre" by last evening, according to Sunbelt Software, and some big vendors were still not picking it up Friday morning, Hypponen said.

F-Secure and Sophos are blocking the virus and all major vendors are likely to do so soon, he said. Some email filtering systems were also not blocking the virus by this golmorning.

The virus is being hosted on several servers around the world, which will increase the time it takes to identify and clean them all. They appear to be web servers that have been hacked, Hypponen said. The SANS Internet Storm Center asked administrators to check their logs to make sure they are not hosting the file.

The virus affects only Windows users. "Microsoft is aware of this issue and is currently investigating this matter, including customer impact," a spokeswoman said.

The final version of IE 7 was released last October, so Microsoft is unlikely to be advertising a beta of the product. Users can download a real version of the software at Microsoft's Internet Explorer home page.