UPDATE 3-LinkedIn suffers data breach

Thu Jun 7, 2012 7:17am IST

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* Company confirms breach

* LinkedIn sent affected members emails to change passwords

By Jim Finkle and Jennifer Saba

BOSTON/NEW YORK, June 6 (Reuters) - LinkedIn said on Wednesday that it had a data breach that compromised the passwords of some of the social network's members.

LinkedIn engineer Vicente Silveira confirmed on the website's blog that some passwords were "compromised."

"We are continuing to investigate this situation," he said.

LinkedIn said it sent emails to members whose passwords were affected, explaining how to reset them since they were no longer valid on the site.

LinkedIn, which made its stock debut last year, is a social media company that caters to companies seeking employees and people scouting for jobs.

It has more than 161 million members worldwide. One of the Mountain View, California-based company's main initiatives is to grow internationally - 61 percent of its membership is located outside the United States.

Marcus Carey, security researcher at Boston-based Rapid7, said he believed the attackers had been inside LinkedIn's network for at least several days, based on an analysis of the type of information stolen and quantity of data posted on forums.

"While LinkedIn is investigating the breach, the attackers may still have access to the system," Carey warned. "If the attackers are still entrenched in the network, then users who have already changed their passwords may have to do so a second time."

Officials with LinkedIn declined to comment on whether an attack might still be in progress.

The breach is the latest in a string of high-profile hacks affecting companies and governments around the world, which have put the personal information of millions at risk.

News of the breach surfaced on Wednesday when computer security experts said they discovered files with some 6.4 million encrypted passwords on underground websites where criminal hackers frequently exchange stolen information.

Graham Cluley, a senior technology consultant with British computer security software maker Sophos said that it is not yet clear if all of those passwords belong to LinkedIn members.

The files included only passwords and not corresponding email addresses, which means that people who download the files and decrypt, or unscramble, the passwords will not easily be able to access any accounts with compromised passwords.

Yet analysts said it is likely that the hackers who stole the passwords also have the corresponding email addresses and would be able to access the accounts.

NEEDS MORE SALT?

At least two security experts who examined the files containing the LinkedIn passwords said the company had failed to use best practices for protecting the data.

The experts said that LinkedIn used a vanilla or basic technique for encrypting, or scrambling, the passwords which allowed hackers to quickly unscramble all passwords after they figured out the formula by which any single password had been encrypted.

The social network could have made it extremely tedious for the passwords to be unscrambled by using a technique known as "salting", which means adding a secret code to each password before it is encrypted.

"What they did is considered to be poor practice," said Mary Landesman, security researcher with Cloudmark, a company that helps secure messaging systems.

LinkedIn officials declined to comment on the criticism, saying it was discussing the breach only on its official blog. ()

Silveira said in the blog that the company just recently put in place new security measures to protect customer passwords, including the use of salting techniques.

Last year, a security researcher warned that LinkedIn had flaws in the way it managed communications with browsers to authorize logins, making accounts more vulnerable to attack. The company responded by tightening its procedures for logins.

LinkedIn was co-founded by former PayPal executive Reid Hoffman in 2002 and makes money selling marketing services and subscriptions to companies and job seekers.

LinkedIn shares closed 8 cents higher at $93.08 on Wednesday.

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