The amount of new malware has never been higher. F-Secure labs are receiving an average of 25,000 malware samples every day, seven days a week. If this trend continues, the total number of viruses and Trojans will pass the one million mark by the end of 2008.

While there are more viruses being created than ever before, people often actually report seeing less of them.

One reason behind this illusion is that malware authors are once again changing their tactics in how to infect our computers. A year or two ago, most malware was spread via email attachments, which resulted in mass outbreaks like Bagle, Mydoom and Warezov. Nowadays sending .EXE attachments in email doesn't work so well for the criminals because almost every company and organisation is filtering out such risky attachments from their email traffic.

The criminals' new preferred way of spreading malware is by drive-by downloads on the web. These attacks often still start with an email spam run but the attachment in the email has been replaced by a web link, which takes you to the malicious website. So instead of getting infected over SMTP, you get infected over HTTP.

Drive-by downloads

Infection by a drive-by download can happen automatically just by visiting a website, unless you have a fully patched operating system, browser and browser plug-ins. Unfortunately, most people have some vulnerabilities in their systems. Infection can also take place when you are fooled into manually clicking on a download and running a program from the web page that contains the malware.

There are several methods criminals use to gather traffic to these websites. A common approach is to launch an email spam campaign containing messages that tempt people to click on a link. Messages like "There is a video of you on YouTube", or "You have received a greeting card", or "Thank you for your order" have been popular baits.

Another method used by criminals is to create many web pages with thousands of different keywords which are indexed by Google, and then simply wait for people to visit these sites. So when you do a search for something innocuous like "knitting mittens" (as a random example), and click on a search result that looks just like all the others, you are actually getting your computer infected. Typically, an infection by an automatic exploit happens without you realising it or seeing anything strange on the computer screen.

The third method of distributing malware involves the criminals hacking into existing high profile, high traffic websites. Unlike the joke defacements that some hackers played on the front pages of prominent websites in the past, today's criminal hackers don't change the front page at all. They simply insert a line of javascript on the front page which uses an exploit to infect your machine when you go there. Everything works and looks as normal.

This has happened to the websites of some popular magazines which can have a million users every single day. People trust sites that are part of their daily routine, and they couldn't suspect that anything bad could happen when they go there.

Another vector for drive-by downloads are infiltrated ad networks. We are seeing more and more advertising displayed on high-profile websites. By infiltrating the ad networks, the criminals don't have to hack a site but their exploit code will still be shown to millions of users, often without the knowledge of the webmaster of those sites. Examples of where this has happened include, Expedia, NHL, and MLB.

It is important to be aware of this shift from SMTP to HTTP infections, which can be exploited by the criminals in many ways. Companies often measure their risk of getting infected by looking at the amount of stopped attachments at their email gateway. Those numbers are definitely going down, but the actual risk of getting infected probably isn't.

Individuals and companies should therefore be scanning their web traffic for malware - as well as filtering their FTP traffic. In parallel to the switch from SMTP to HTTP as a way of spreading malware, we are now also seeing more and more malicious emails that link to malware via FTP links.

Advanced rootkit emerges

MBR rootkit - known as Mebroot - is probably the stealthiest recent malware we have observed, and has so far been distributed by drive-by downloads.

Mebroot replaces the infected system's Master Boot Record (MBR), which is the first physical sector of the hard drive and contains the first code loaded and executed from the drive during the boot process. It keeps the amount of system modifications to a minimum and is very challenging to detect from within the infected system.

MBR viruses used to be the most common form of viruses at the time of the DOS operating system about 15 years ago. Recently there were academic papers published in conferences discussing whether this kind of MBR stealth could ever happen in the age of Windows. We have been very surprised to see it happening for real now in 2008.

This means that the criminals have both the funds and the high level expertise to develop such complex attacks. They have succeeded in developing code that loads from the boot sector of the hard drive, stays alive while Windows boots up, then loads parts of itself and injects to the operating system when Windows is up and running, and manages to hide all this very effectively.

We are likely to see this technique being used by quite a variety of malware. These first MBR rootkits are banking Trojans targeting several online banks, where the criminals are clearly seeing an opportunity to make a return on their investment.

First mobile ransom Trojan

Making money is what today's malware is all about and the first ransom Trojans for smartphones have been found in China. We have already seen similar Trojans on the PC side before which infect your computer, take your data 'hostage' or somehow disrupt your computer's capabilities, and then offer to restore everything back to normal if you pay out the ransom money. Typically, the ransom Trojan first encrypts your hard drive and then sends you a password after you have sent money to the criminals via an online money transfer system.

In the case of Kiazha, the first smartphone ransom Trojan, you get infected by downloading a shareware lookalike program on your phone, which then drops several known older viruses on your phone. Next it sends a message explaining that you can only get the phone fixed by transferring the equivalent of seven dollars to the attackers through an online payment system. Today's smartphones are so important to many people that they are prepared to pay a ransom to get back their phonebook, calendar and mobile emails, so we might well be seeing much more of this type of malware in the future.

More mobile trouble

The Beselo worms spread via MMS and Bluetooth by using a novel form of social engineering to trick users into installing an incoming SIS application installation file. What makes Beselo interesting is that instead of a standard SIS extension, the Beselo family uses common media file extensions. This leads the recipient to believe that he or she is receiving a picture or sound file instead of a Symbian application. The recipient is then far more likely to answer "yes" to any questions the phone prompts after clicking on such an incoming file.

The filenames used by Beselo are beauty.jpg, sex.mp3, and love.rm. So if you have a Symbian S60 phone and receive a media file, answer "no" to any installation prompt that appears when trying to open the file. There is no reason for any image file to ask installation questions on the Symbian platform, so any image or sound file that does something else than play immediately is definitely not what it claims to be .Beselo worms are compiled for S60 2nd Edition phones. Attempting to open the file on a 3rd Edition phone will probably cause an error message rather than an installation prompt.

HatiHati.A is another troublemaker, a worm-like application that spreads via MMC cards. Once the worm has copied itself to a new device, it starts sending SMS messages to a predefined number which can prove very expensive.

Both PC and smart phone users can protect themselves by using an up-to-date security services from well known vendors.