Interesting Tactic: Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

 Articles of Interest, Social Media, Technology & Digital Security  No Responses »
May 122012
 

Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO

Bloomberg
By Danielle Kucera, Sanat Vallikappen and Christine Harper 
May 11, 2012

Video:    Bloomberg segment

Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.

Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin’s stake is about 4 percent, according to the website whoownsfacebook.com. At the high end of the proposed IPO market capitalization, that would be worth about $3.84 billion. His holdings aren’t listed in Facebook’s regulatory filings.

 

Eduardo Saverin, co-founder of Facebook, in New York City.

Photographer: Jason Kempin/Getty Images for Common Sense Media

 

 

Global Investors Poll Finds Facebook Is Overvalued

May 11 (Bloomberg) — Results of a Bloomberg investor poll show that 79 percent of respondents say Facebook is overvalued at $96 billion. Dominic Chu reports on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)

Saverin, 30, joins a growing number of people giving up U.S. citizenship ahead of a possible increase in tax rates for top earners. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dormitory and stand to reap billions of dollars after the world’s largest social network holds its IPO.

“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said Tom Goodman, a spokesman for Saverin, in an e-mailed statement.

Saverin’s name is on a list of people who chose to renounce citizenship as of April 30, published by the Internal Revenue Service. Saverin made that move “around September” of last year, according to his spokesman.

Besides helping cut tax bills stemming from the Facebook, the move may also help him avoid capital gains taxes on future investments since Singapore doesn’t have a capital gains tax.

Exit Tax

Saverin won’t escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don’t sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan’s law school. For tax purposes, the IRS treats the stock as if it has been sold.

Renouncing your citizenship well in advance of an IPO is “a very smart idea,” from a tax standpoint, Avi-Yonah said. “Once it’s public you can’t fool around with the value.”

Saverin’s estimated gain, and subsequent tax bill, would be based on an appraisal by his tax advisers. They could have valued his Facebook stake at less than it will be worth once shares trade publicly, reducing his liability. For tax purposes, Saverin could say that the value of his stake should be discounted because of the potential difficulty of selling the shares while the company remains private.

Zuckerberg Scuffle

Saverin previously scuffled with Zuckerberg, his Harvard University classmate, over his ownership in Facebook. Saverin sued him and settled for an undisclosed amount.

The 2010 movie “The Social Network” added to Saverin’s fame after it portrayed him as a scorned friend who provided the company’s early financing and then was squeezed out. In the film, written by Aaron Sorkin, Saverin was portrayed by Andrew Garfield, who will play Spider-Man in “The Amazing Spider- Man,” due to be released in July.

Saverin moved to the U.S. in 1992, and became a citizen in 1998, his spokesman said. He has invested in Asian, U.S. and European companies, according to his spokesman.

He plans to invest in Brazilian and in other global companies that have strong interests in entering the Asian markets. “Accordingly, it made the most sense for him to use Singapore as a home base,” Goodman said in the statement.

Jumio, ShopSavvy

His U.S. holdings include Jumio Inc., an online payments company, and ShopSavvy Inc., a price-comparison service.

Renouncing citizenship is an option chosen by increasing numbers of Americans. A record 1,780 gave up their U.S. passports last year compared with 235 in 2008, according to government records.

Income-tax rates for top U.S. earners will rise to 39.6 percent from 35 percent next year and rates on capital gains and dividends also are scheduled to rise, unless Congress blocks the increases.

“It’s a loss for the U.S. to have many well-educated people who actually have a great deal of affection for America make that choice,” said Richard Weisman, head of the global tax practice at Baker & McKenzie in Hong Kong. “The tax cost, complexity and the traps for the unwary are among the considerations.”

Combating Evasion

Some of the world’s largest wealth-management firms have ramped up efforts to fight tax evasion ahead of Washington’s implementation of the Foreign Account Tax Compliance Act, known as Fatca, which seeks to prevent tax evasion by Americans with offshore accounts. HSBC Holdings Plc, Deutsche Bank AG, Bank of Singapore Ltd. and DBS Group Holdings Ltd. all say they have turned away business.

The 2010 law, to be phased in starting Jan. 1, 2013, requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients. That means additional compliance costs for banks and fewer investment options and advisers for all U.S. citizens living abroad, which may depress banks’ returns.

Facebook plans to price its IPO on May 17, offering 337.4 million shares at $28 to $35 each. The shares will be listed on the Nasdaq Stock Market under the symbol FB. Morgan Stanley, JPMorgan Chase & Co. and Goldman Sachs Group Inc. are leading the sale.

 

Direct Link:  http://www.bloomberg.com/news/2012-05-11/facebook-co-founder-saverin-gives-up-u-s-citizenship-before-ipo.html

 Posted by at 13:43  Tagged with: , , , , , , , , , , , , , ,

The Reaction To ‘Girls Around Me’ Was Far More Disturbing Than The ‘Creepy’ App Itself

 Articles of Interest, Crimes & Criminal Activity (Organized Crime, Narcotics, Predators, Cyber Crime, Cyber Stalking, UnSolved), Firearms, Weapons & Personal Safety, National security, Terrorism, Cyber Terrorism & Related Crimes, Social Media, Technology & Digital Security  No Responses »
Apr 022012
 

 

The Reaction To ‘Girls Around Me’ Was Far More Disturbing Than The ‘Creepy’ App Itself

 

FORBES

by Kashmir Hill

Forbes Staff

April 2, 2012

 

 

 

Welcome to The Not-So Private Parts where technology & privacy collide

 

  • All men are creepy stalkers looking for new digital aids to help them catch and rape women.
  • All women are damsels-in-distress who have no idea how much danger they are exposing themselves to with every Foursquare check-in.
  • “You’re too public with your digital data, ladies,” may be the new “your skirt was too short and you had it coming.”

 

Those are my takeaways from the past week’s furor over “Girls Around Me,” a geolocation app created by Russian-based i-Free Innovations, that used public data from Foursquare and Facebook to create a map showing ladies in one’s immediate area. The app has been in the Apple iTunes store for months, but got widespread attention after a write-up in Cult of Mac on Friday that described it as “a tool for rapists and stalkers.” Cult’s John Brownlee fired up the app to display it for friends at a BBQ, pulling up a map of their Boston neighborhood dotted with the photos of “girls with publicly visible Facebook profiles who have checked into these locations recently using Foursquare.” The app’s creators tell me the app was downloaded over 70,000 times.

After seeing it, one of Brownlee’s friends “went pale,” apparently terrified, when told that many people don’t understand their privacy settings and so probably have no idea they’re making themselves so easily findable (and thus stalk-able and rape-able). After the alarming write-up, Foursquare revoked the app’s access to its API. Shortly thereafter, i-Free Innovations pulled the now-useless app from the iTunes store.

i-Free did itself no favors in its design of ‘Girls Around Me,’ consisting of Bond-style silhouettes of naked ladies dancing and posing provocatively, but I think the reaction to the app was overblown. For one, how do we know that the women who could be found on this map did not want to be visible in this way? A recent Pew study found that women are the savvier sex when it comes to privacy settings, visiting them and ramping them up at much higher rates than men. Those Bostonians who popped up on Brownlee’s map may want to be publicly broadcasting where they are. There are, after all, dating apps, such as Blendr, that do offer exactly that to both men and women. Sometimes we can be found because we want to be found.

 

 

 

Many of us have become comfortable putting ourselves out there publicly in the hopes of making connections with friends and with strangers, whether through Facebook, Twitter, or OKCupid. It’s only natural that this digital openness will transfer over to the ‘real world,’ and that we will start proactively projecting our digital selves to facilitate in-person interactions. (For example, KLM is now allowing passengers to link their digital identities to their seats on the plane so that people can choose seatmates accordingly.)

We increasingly live in a ‘creepy’ world, in which we can find and manipulate information in unforeseeable ways. These new information flows sometimes feel ‘creepy’ because they’re new, unfamiliar, and to some people, unexpected. In this case, I think the backlash is rife with overly-aggressive privacy protectionism. The women “exposed” by ‘Girls Around Me’ have chosen to be on Foursquare, and the company tells me that the app was only able to pull up a woman’s Facebook profile if she chose to link it to her Foursquare account. In rejecting and banishing the app, we’re  choosing to ignore the publicity choices these women have made (assuming, as Brownlee, does, that they did not intend to be that public), in the name of keeping them safe. And we make the ugly assumption that men who might want to check out women in the area have nefarious intentions. If you extend this kind of thinking ‘offline,’ we would be calling on all women to wear burkas so potential rapists and stalkers don’t spot them on the streets and follow them home.

I’m sorry, my friends, but I think apps like ‘Girls Around Me’ are the future. Some of us Foursquare users and public Twitterers are choosing to give up our privacy — and how much to give up, depending on the settings we choose. We don’t fear making connections with strangers; we crave it. Companies like Apple are patenting technologies that allow our phones to broadcast our identities to those around us and alert us when we have things in common. This is inevitable, and we can’t and shouldn’t assume that all strangers are rapists and stalkers waiting to pounce. (And for those that are, we may not be far from a future in which the “digital identities” projected include the fact that this particular guy is on a sex offenders’ registry or that this particular lady has been described by past beaus as “stalkery.”)

“Since the app’s launch we’ve seen numerous positive comments from users who claimed that the app helped them to discover ‘hot spots’ – venues that are popular among girls or boys,” wrote the app’s creators in a statement emailed this weekend. “Since the apps launch til last Friday nobody ever raised a privacy concern because, again, it is clearly stated that Girls Around Me cannot show the user more data than social network already does.”

As Roger Kay notes, there are some people who “haven’t woken up to how vulnerable we are with all our information out there waving in the wind.” And Brownlee ended his piece by noting that though their app is “creepy,” the i-Free folks weren’t doing anything wrong and might even provide a benefit:

This is an app you should download to teach the people you care about that privacy issues are real, that social networks like Facebook and Foursquare expose you and the ones you love, and that if you do not know exactly how much you are sharing, you are as easily preyed upon as if you were naked. I can think of no better way to get a person to realize that they should understand their Facebook privacy settings then pulling out this app.

Yes, people, think about your privacy settings. They’re important. But critics, also remember that some of us have thought about our privacy settings, chosen accordingly, and don’t mind showing up on geo-mapping apps. We’re not all damsels-in-distress going pale at the thought of being seen in public places and digital spaces.

 

Check Out:  Nine Creepy Apps for Android, iOS, and the Web

 

Direct Link:  http://www.forbes.com/sites/kashmirhill/2012/04/02/the-reaction-to-girls-around-me-was-far-more-disturbing-than-the-creepy-app-itself/

 Posted by at 21:47  Tagged with: , , , , , , , , , , , , , , , , ,

Facebook’s Timeline: How to Protect Your Privacy!

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Mar 202012
 

Facebook’s Timeline: How to Protect Your Privacy

 

Zone Alarm News

December 20, 2011

 

 

Screen Shot 2011-12-20 at 2.58.26 PM

Facebook has finally introduced its much-publicized profile revamp called “Timeline.” Now, user profiles appear in a digital scrapbook format organized chronologically, which highlights the most important and memorable moments of your life—on Facebook. The new format has garnered praise, and criticism from users concerned about their profile privacy. Previously, there was no way to review a profile’s history without clicking into oblivion. Now, Timeline makes your entire Facebook activity history easily searchable—and highlights the stand-out moments (including the posts that received the most attention, which could be a drunk party photo that you’d prefer your new coworkers not see). The bad news for those not eager to revisit their past is that eventually all Facebook users will have to adopt the Timeline format. The good news? You can do some damage control before your Timeline goes live. Here’s a cheat sheet to protect your privacy on Timeline.

 

Make Changes Within Seven Days.

You can choose to activate Timeline now or wait until Facebook converts all profiles, but the most important thing to know is that whenever the transition happens, you will have seven days after notification to make all necessary edits to your profile before it goes live. You can push your profile live at any time during these seven days, but after that it will publish automatically.

 

Review Your Activity Log.

The Activity Log is where you can see all your Facebook activity from the beginning, review the privacy settings of certain posts, and feature, hide, or delete all posts. Only you can see your Activity Log, so use it as your dashboard to review your content. One good first step before you start adjusting is to automatically make all posts viewable only to friends (this way only your personal network can see your Timeline when it goes live, regardless of previous privacy settings). Go to your Privacy Settings page, click “Limit the Audience for Previous Post,” click “Manage Past Post Visibility,” and select “Limit Old Posts.” You can then adjust the visibility of individual posts later.

 

Hide Posts You Don’t Want Anyone to See.

As you review your profile, you can hide—or delete—anything cringe-worthy or questionable content, including photos, comments, status updates, etc. In the Activity Log, click on the circle icon, and select “Hidden on Timeline” or “Delete Post.” If you’re reviewing the post on your timeline page, hover over the top right corner of the post and click the pencil icon to see your visibility options.

 

 

Limit the Posts You Want Some People to See.

For those posts you only want specific people to see, go to your timeline page, click the “people” icon by your name, and select the appropriate group you want to grant visibility to (including custom, in which you can select particular people).

 

Preserve Posts Only You Want to See.

If there is a post in your Timeline you want to keep, but you don’t want your network to see, you can make it visible only to you by clicking the pencil icon and selecting “Only Me.” Note: You can only do this to your own posts, not those made by others.

 

 

Review Your Timeline.

When you’re ready to publish, you can review what your timeline will look like to other people by clicking the gear icon and selecting “View As.”

Whether you hop on the Timeline train today or wait until you have to, consider carefully what information you share on Facebook and all your social networks.

 

Direct Link:  http://blog.zonealarm.com/2011/12/facebooks-timeline-how-to-protect-your-privacy.html

 Posted by at 18:42  Tagged with: , , , , , , ,

Which Web Browser Is the Most Secure?

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Mar 202012
 

Which Web Browser Is the Most Secure?

 

Zone Alarm News

February 28, 2012

 

Which Web Browser Is the Most Secure?

When a massive spam attack posted violent and pornographic images across the news feeds of many Facebook users last year, many wondered how hackers had launched the attack. Turns out, it was by exploiting a vulnerability in users’ web browsers.

The event shed light on an often-overlooked issue of online security, your web browser. There are many browsers available, such as Mozilla Firefox, Google Chrome, and Microsoft’s Internet Explorer. But the real question is: which browser offers the most protection from malware, adware, viruses, and hackers?

Many browsers are fighting for market share, and therefore paying more attention to their security, but popularity and security are not always equal.

A recent Accuvant study revealed that Chrome (the second most popular browser) ranks as the most secure web browser when compared to Internet Explorer (the most popular) and Firefox. Interestingly, this month the German government named Chrome the most secure browser, perhaps lending weight to the study. However, critics have pointed out that the study was commissioned by Google (creator of Chrome), and the findings may therefore be skewed.

Still, according to the study, Chrome ranks the highest in creating and putting into use new safety measures to boost its security, with Internet Explorer only slightly behind Chrome. Firefox was deemed the least secure in the study.

Despite these recent findings, the browser wars remain a hot-button issue, with various entities dubbing some browsers more secure than others. During the 2011 hacker conference, Pwn2Own, hackers attacked four popular browsers: Internet Explorer, Apple Safari, Mozilla Firefox, and Google Chrome. The hackers were able to quickly compromise Internet Explorer and Safari. In fact, these hackers were able to hack the browsers so thoroughly that they managed to write files on the hard drive of the computer they were attacking. Interestingly (and contrary to the Accuvant study findings), Chrome and Firefox both resisted hacking attacks during the exercise.

Regardless of the browser, manufacturers are always working to ensure users can enjoy surfing the web safely and securely—and that’s the good news. The bad news, as the Pwn2Own conference revealed, is that cybercriminals worldwide are also working hard to figure out new ways to hack your browser.

This means that it’s important for users to educate themselves about this threat and take the steps necessary to lessen their chances of falling victim to a browser security breach. What should you do? Keep the following tips in mind.

  • If you plan to download a new or different browser, make sure you are downloading a legitimate version. Go directly to the manufacturer’s site, and ignore ads or popups (which may be tricks to get you to install a corrupt version).
  • Set your online preferences to allow for software updates. Some browsers, such as Internet Explorer and Safari, will automatically update with your operating system. But others, including Firefox, automatically update themselves to deploy security patches and provide enhanced security features.
  • Set your browser’s security settings to the highest possible to prevent others from exploiting your browser.
  • Disable popups in your browsers or install security software that prevents popup windows. Deploying infected popups is a popular way that hackers trick users into downloading malware.

No matter which browser you use, always follow safe practices and be alert to any unusual or suspicious functioning when you log onto the web.

 

Direct Link:  http://blog.zonealarm.com/2012/02/which-web-browser-is-the-most-secure.html

 Posted by at 18:08  Tagged with: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Censoring of Tweets Sets Off #Outrage

 Articles of Interest, Social Media, Technology & Digital Security  No Responses »
Jan 302012
 

 

Censoring of Tweets Sets Off #Outrage

The New York Times
By SOMINI SENGUPTA
January 27, 2012

SAN FRANCISCO —

It started five years ago after a young engineer in San Francisco sketched out a quirky little Web tool for telling your friends what you were up to. It became a bullhorn for millions of people worldwide, especially vital in nations that tend to muzzle their own people.

Peter Macdiarmid/Getty Images

 

Checking Twitter on Friday in Cairo. Twitter helped protesters organize in Egypt, but a new policy could alter that dynamic.

But this week, in a sort of coming-of-age moment, Twitter announced that upon request, it would block certain messages in countries where they were deemed illegal. The move immediately prompted outcry, argument and even calls for a boycott from some users.

Twitter in turn sought to explain that this was the best way to comply with the laws of different countries. And the whole episode, swiftly amplified worldwide through Twitter itself, offered a telling glimpse into what happens when a scrappy Internet start-up tries to become a multinational business.

“Thank you for the #censorship, #twitter, with love from the governments of #Syria, #Bahrain, #Iran, #Turkey, #China, #Saudi and friends,” wrote Björn Nilsson, a user in Sweden.

Bianca Jagger asked, almost existentially, “How are we going to boycott #TWITTER?”

Zeynep Tufekci, an assistant professor at the University of North Carolina at Chapel Hill, took the other side. “I’m defending Twitter’s policy because it is the one I hope others adopt: transparent, minimally compliant w/ law, user-empowering,” she wrote.

Twitter, like other Internet companies, has always had to remove content that is illegal in one country or another, whether it is a copyright violation, child pornography or something else. What is different about Twitter’s announcement is that it plans to redact messages only in those countries where they are illegal, and only if the authorities there make a valid request.

So if someone posts a message that insults the monarchy of Thailand, which is punishable by a jail term, it will be blocked and unavailable to Twitter users in that country, but still visible elsewhere. What is more, Twitter users in Thailand will be put on notice that something was removed: A gray box will show up in its place, with a clear note: “Tweet withheld,” it will read. “This tweet from @username has been withheld in: Thailand.”

Think of it as the digital equivalent of a newspaper responding to old-fashioned government censorship with a blank front page.

“We have always had the obligation to remove illegal content. This is a way to keep it up in places where we can,” said Alex Macgillivray, general counsel at Twitter. “We have been working on this awhile. We needed to figure out how to deal with this as a company.”

The majority of Twitter’s 100 million users are overseas and it has several offices abroad working to expand its business and drum up local advertising. Twitter’s president, Jack Dorsey, said this week that it would open an office in Germany, which prohibits Nazi material online and offline.

The announcement signals the choice that a service like Twitter has to make about its own existence: Should it be more of a free-speech tool that can be used in defiance of governments, as happened during the Arab Spring protests, or a commercial venture that necessarily must obey the laws of the lands where it seeks to attract customers and eventually make money?

Tim Wu, a professor at Columbia Law School and author of “The Master Switch,” said the changes could undermine the usefulness of Twitter in authoritarian countries.

“I don’t fault them for wanting to run a normal business,” he said. “It does suggest someone or something else needs to take Twitter’s place as a political tool.”

Professor Wu urged the company to use discretion: “Twitter needs to be careful not to be in a position where it’s no longer helpful to a rebellion against oppressive governments. It needs to remain its old self in some circumstances.”

Twitter’s policy of allowing its users to adopt pseudonyms made it particularly useful to many protest organizers in the Arab world, and its chief executive went so far as to call it “the free-speech wing of the free-speech party.”

But Professor Wu wondered aloud if the new policy would have allowed Egyptians to organize protests using the service.

Twitter insists its new system is a way to promote greater transparency, not less. The company says it will not filter content before it is posted. It will not remove material that may be offensive, only that which it thinks is illegal. And it said it would also try to notify users whose posts had been withheld by sending them an e-mail with an explanation.

The company identifies the locations of its users by looking at the Internet Protocol addresses of their computers or phones. But it also allows users to manually set their location or choose “worldwide.” Essentially that is a way to circumvent the blocking system entirely. A user in Syria can simply change her location setting to “worldwide” and see everything.

Jillian C. York, director for international freedom of expression at the Electronic Frontier Foundation, a civil liberties group, successfully tried this herself after Twitter announced its new approach. “Unfortunately it is a necessary evil when offering a service in certain countries,” Ms. York said of the new system.

Critics on Twitter surmised that the company had been pressed to adopt country-specific censorship after a major investment by a Saudi prince, a theory that Mr. Macgillivray quickly dismissed.

Facebook also handles requests to remove content that is illegal in certain countries, though it does not explain what it removes and for what reason. In its search results, Google signals what it is required to redact under a certain country’s law — and in the case of YouTube, a Google product, it can block content country by country.

Twitter has followed in Google’s footsteps in another respect. It has opted to post some of the removal requests it receives on Chilling Effects, a site jointly run by the Electronic Frontier Foundation and several American universities. Mr. Macgillivray was previously on the legal team at Google and, as a student at Harvard, he worked on Chilling Effects.

“We have always tried to let people talk and tweet. That has not been good for despots,” Mr. Macgillivray said in response to the criticism. “There is no change in policy. What this does is it strengthens, when we are legally required to, our ability to withhold something and to let people know it has been withheld.”

Still, not long after the announcement, there were calls for a silent protest on Saturday — and naturally, a hashtag to go with it.

“I’m joining the #TwitterBlackout & won’t tweet tomorrow,” wrote a user identified as Omar Johani. “Time to go back to getting news 12 hours after it happened.”

 

Direct Link:  http://www.nytimes.com/2012/01/28/technology/when-twitter-blocks-tweets-its-outrage.html?nl=todaysheadlines&emc=tha26

 Posted by at 21:22  Tagged with: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Web Gang Operating in the Open

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Jan 222012
 

 

Web Gang Operating in the Open

The New York Times
By RIVA RICHMOND
January 16, 2012

Five men believed to be responsible for spreading a notorious computer worm on Facebook and other social networks — and pocketing several million dollars from online schemes — are hiding in plain sight in St. Petersburg, Russia, according to investigators at Facebook and several independent computer security researchers.

 

 

A member of the Koobface gang posted to Foursquare, showing an office, complete with coordinates, in St. Petersburg.

 

The men live comfortable lives in St. Petersburg — and have frolicked on luxury vacations in places like Monte Carlo, Bali and, earlier this month, Turkey, according to photographs posted on social network sites — even though their identities have been known for years to Facebook, computer security investigators and law enforcement officials.

One member of the group, which is popularly known as the Koobface gang, has regularly broadcast the coordinates of its offices by checking in on Foursquare, a location-based social network, and posting the news to Twitter. Photographs on Foursquare also show other suspected members of the group working on Macs in a loftlike room that looks like offices used by tech start-ups in cities around the world.

Beginning in July 2008, the Koobface gang aimed at Web users with invitations to watch a funny or sexy video. Those curious enough to click the link got a message to update their computer’s Flash software, which begins the download of the Koobface malware. Victims’ computers are drafted into a “botnet,” or network of infected PCs, and are sent official-looking advertisements of fake antivirus software and their Web searches are also hijacked and the clicks delivered to unscrupulous marketers. The group made money from people who bought the bogus software and from unsuspecting advertisers.

The security software firm Kaspersky Labs has estimated the network includes 400,000 to 800,000 PCs worldwide at its height in 2010. Victims are often unaware their machines have been compromised.

The Koobface gang’s freedom underscores how hard it is to apprehend international computer criminals, even when identities are known. These groups tend to operate in countries where they can work unmolested by the local authorities, and where cooperation with United States and European law enforcement agencies is poor. Meanwhile, Western law enforcement is awash in computer crime and lacks the resources and skilled manpower to tackle it effectively, especially when evidence putting individuals’ fingers on keyboards must be collected abroad.

On Tuesday, Facebook plans to announce that it will begin sharing information about the group and how to fight them with security researchers and other Internet companies. It believes public namings can make it harder for such groups to operate and send a message to the criminal underground.

None of the men have been charged with a crime and no law enforcement agencies have confirmed they are under investigation.

The group investigators have identified has adopted the tongue-in-cheek name, Ali Baba & 4: Anton Korotchenko, who uses the online nickname “KrotReal”; Stanislav Avdeyko, known as “leDed”; Svyatoslav E. Polichuck, who goes by “PsViat” and “PsycoMan”; Roman P. Koturbach, who uses the online moniker “PoMuc”; and Alexander Koltyshev, or “Floppy.” )

Efforts to contact members of the group for comment have been unsuccessful.

Weeks after early versions of the Koobface worm began appearing on Facebook, investigators inside the company were able to trace the attacks to those responsible. “We’ve had a picture of one of the guys in a scuba mask on our wall since 2008,” said Ryan McGeehan, manager of investigations and incident response at Facebook.

Since then, Facebook and several independent security researchers have provided law enforcement agencies, including the Federal Bureau of Investigation, with information and evidence. Most notably, Jan Droemer, a 32-year-old independent researcher in Germany, has provided important information and leads, including a password-free view inside Koobface’s command-and-control system, known as the “Mothership.” Mr. Droemer spent nights and weekends for four months in late 2009 and early 2010 unmasking the gang members using only information available publicly on the Internet.

The F.B.I. declined to comment.

That computer crime pays is fueling a boom that is leaving few Internet users and businesses unscathed. The toll on consumers alone is estimated at $114 billion annually worldwide, according to a September 2011 study by the security software maker Symantec.

Russia, in particular, has a reputation as a hacker haven, although it has pursued several prominent cases against spammers recently. The Soviet education system’s emphasis on math and science combined with post-Communist economic collapse and weak private industry meant there were many highly trained engineers, but few legitimate outlets for their skills, said Vsevolod Gunitskiy, an assistant professor at the University of Toronto.

“Russia is sort of a perfect storm for cybercrime,” he said. The proliferation of organized crime and official corruption created “this very strong legacy of contempt for the laws and general culture of criminality.”

The Russian Embassy in Washington said it does not have any information regarding this group and that American law enforcement officials had never contacted the embassy on this issue.

The men investigators believe are behind Koobface look a lot like ordinary software enthusiasts, albeit with more tattoos and an outlaw persona. Mr. Avdeyko, who is two decades older than the other men and has been tied to an infamous spyware program dating to 2003 called CoolWebSearch, appears to hold a leadership role.

He and at least two of the other men have worked in the world of online pornography, said Mr. Droemer. Mr. Korotchenko and several of the other men apparently tried to run a legitimate mobile software and services business, colorfully named MobSoft Ltd. They did not reply to e-mails requesting interviews.

Mr. Droemer said the gang’s success was more attributable to workaday persistence and willingness to adapt than technical sophistication. They could have spread Koobface to many more PCs, he said. “They could have done a lot more technical things to make it more perfect, more marvelous. But there was just no need to do it. They were just investing as much to get the revenue they wanted to get.”

The group cleverly harnessed the infrastructures of powerful online services — from Facebook and Twitter to Google’s search engine and Blogger — to do the heavy lifting, and may have run its enterprise with just a few computers.

Koobface will probably earn its place in history for pioneering and leading the criminal exploitation of social networks, rather than the size of its profits. Data found in the botnet’s command-and-control system suggests the group has earned at least $2 million a year for the 3 1/2 years of its existence, although the actual total is very likely higher, Mr. Droemer said.

Experts say the gang could have further enriched itself through identity fraud, since it has had access to millions of PCs and social-network profiles, but that there is no evidence it has done so.

Indeed, in a 2009 Christmas e-card to security researchers left inside victim computers, the gang vowed it would never steal credit card or banking information. It called viruses “something awful.” Its tactics have been less ruthless than those of many other hacker groups, experts said. For instance, it has never deployed malicious programs that install automatically, and rather has required its victims to make several unwise clicks.

While the Koobface gang operates freely, Facebook has focused on building elaborate defenses against the worm, which relentlessly struck the site again and again until disappearing in March. The gang abandoned the site after Facebook mounted a major counteroffensive, which included an effort to dismantle the command-and-control system of the botnet and a simultaneous push to scrub its network of the worm and clean up infections in users’ PCs.

“We fired all the different guns at the same time,” said Joe Sullivan, chief security officer at Facebook. “If we could literally shut down the command-and-control, all the infections, and just make them have to start over from scratch in all contexts, we figured they might decide to move on.” He hoped they would conclude Facebook was unprofitable, he said.

But Facebook’s effort and two earlier takedown efforts by security researchers — including one by the Bulgarian researcher Dancho Danchev, who revealed the name of one Koobface member on his blog last week — have failed put an end to Koobface, and smaller sites continue to suffer.

“People who engage in this type of stuff need to know that their name and real identity are going to come out eventually and they’re going to get arrested and they’re going to be targeted,” Mr. Sullivan said. “People are fighting back.”

This article has been revised to reflect the following correction:

Correction: January 19, 2012

An article on Tuesday about the Koobface gang, a Russian group believed to be responsible for spreading a notorious computer worm on social networks, misspelled the surname of one man identified by investigators as a member of the group. He is Alexander Koltyshev, not Koltysehv.

 

Direct Link:  http://www.nytimes.com/2012/01/17/technology/koobface-gang-that-used-facebook-to-spread-worm-operates-in-the-open.html?nl=todaysheadlines&emc=tha26

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