The week in technology: Worm farm

A spate of worms, known by many names including Zotob, took advantage of a newly-discovered hole in Microsoft Windows to wreak havoc in several large organisations. At least a dozen worms were released between August 14 and August 19, all based on code by an underground programmer believed to be living in Russia. The code was released on August 10, just a day after Microsoft publicised the flaw and made a patch available, and prompted a war between competing hackers, who made alterations to cause the worms to delete earlier versions.

Windows 2000 computers, more popular with corporations than home users, were most vulnerable to the worms, whose method of replicating meant they spread more quickly among large networks of computers.

The worm’s propensity for computers on corporate networks was reminiscent of the Blaster and Sasser worms of the past two years. The Sasser worm, released in May last year, was also believed to be based on code written by the same Russian programmer as Zotob.

Zotob and its variants do not destroy data, but leave infected computers exposed so that remote hackers can not only steal information, but use the infected machine as a host for more nefarious activities such as spamming and hosting fraudulent websites.

The product blog published a comprehensive round-up of the virus variants.

As with most virus outbreaks, the focus inevitably turned to Microsoft and the numerous patches that must be applied to its software. CNet reported a survey by anti-virus software company Sophos, which said a third of business users blamed Microsoft for the outbreak.

Microsoft is still facing an uphill battle to improve its reputation for security. Security holes have already been discovered in the preview version of Vista, the operating system Microsoft plans to release next year to succeed Windows XP.

Google raises more cash

On the eve of the first anniversary of its IPO, new-dotcom darling Google announced a second share offer to raise more than $4bn. While the amount is small compared to its existing market capitalisation of about $78bn, some analysts questioned the need for the the offer when the internet company already has plenty of cash.

The initial dip on the news, and its subsequent rise on speculation of a new business direction for the company, led The Inquirer to sneer that Wall Street “simply doesn’t understand its business model”.

News Corp’s internet affair develops

News Corp’s newfound love of the internet showed no signs of cooling. The media group confirmed it was considering a bid for Blinkx, an internet search company.

However it would not comment on information received by the FT that it was also looking at buying IGN, a video gaming company and internet publisher.

As the internet becomes more popular, younger people are increasingly ditching old media for the online world, and advertising dollars are following them.

Rupert Murdoch, News Corp’s chief executive and chairman, said earlier in the month that the internet is now the group’s key priority,

Murdoch was famously cynical about the internet during the tech boom, but a speech back in April to the American Society of Newspaper Editors in which he described a “revolution in the way young people are accessing news”, flagged a crucial shift in the mogul’s approach to the online world.

A tale of two XBoxes

Microsoft revealed its upcoming game console, the XBox 360, would be released in two different versions - one without a hard drive - and gave pricing for the units, in an early part of what is bound to be another drawn-out price war with Sony’s latest PlayStation.

Slashdot readers, however, were more concerned about the disparity in pricing between the US and European countries.

Microsoft also announced that Toronto-based Celestica would become the third contract manufacturer to build the XBox, joining the two incumbent builders Flextronics International and Wistron.

HP’s reasons to be cheerful

Happy days have returned to Hewlett-Packard, whose shares rose 13 per cent after the group published better-than-expected third quarter results.

It was the first full quarter under new chief executive Mark Hurd, who replaced Carly Fiorina in April. Hurd last month announced a restructuring plan that will see HP’s staff numbers cut by 14,500 - almost 10 per cent of the group’s workforce.