August 3, 2007 4:00 AM PDT

Bug hunting start-up: Pay up, or feel the pain

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"Most major vendors, including Microsoft, have strong corporate values and will not pay for vulnerabilities," Forslof said. "So, making that threat to pay me, or I'll harm your customers, is basically like extortion to them."

DeMott, however, said his company has had some success with its business model.

Over the past four months, the company has seen roughly half of potential customers agree to pay the bug bounty fee, and the other half reject the idea outright. And in one case, a company declined to pay the bug fee but then signed up for VDA's consulting services. To date, two companies have purchased the vulnerabilities that VDA discovered and patched them, DeMott said.

But Ullrich described such customers as "paying for protection."

"There are people who pay protection to the mob. It's really a protection racket," Ullrich said. "I can't see it as a legitimate business model."

Other business models
Bug bounty hunters have a variety of means to generate income, security researchers say.

Auction site WabiSabiLabi, where software companies and security vendors bid on such discoveries, emerged on the scene this summer, amid some controversy that the buyers of the vulnerabilities may be malicious attackers.

Since the Switzerland-based site was announced on July 9, approximately 20 vulnerabilities have been posted on the auction, ranging in price from 200 to 2,600 euros ($274 to $3,564), Roberto Preatoni, WSLabis strategic director, said in an e-mail.

"You should take into account that this market just started, therefore we think it's needed to wait at least six months before seeing real values being expressed in it," Preatoni said.

Three vulnerabilities have been sold on the auction site, while six more are currently on the market as their auction time ticks down.

Other compensation methods for bug hunters have included landing lucrative contracts with software vendors to debug their products, and participating in ongoing formal bug reporting programs offered by Tipping Point, iDefense and the Mozilla Foundation.

Back in 2005, Tipping Point launched its program titled the Zero Day Initiative. The program pays money to security researchers for bugs and proof-of-concept code, or working exploits they discover.

Based on the severity of the vulnerabilities and extent to which they are distributed, Tipping Point will pay researchers based on a sliding scale. Forslof noted Tipping Point generally pays more if a researcher has taken the extra effort to develop proof-of-concept code.

"Based on the amount of money (DeMott) wanted for the bug and working exploit, it would have been in line with what we would have offered," Forslof said. "The amount of money he was asking for was not out of line--it's just the way he went about asking for it from LinkedIn."

Once Tipping Point buys bugs and exploits from security researchers, it then validates the information before passing it on to the software vendor for free. Tipping Point then writes filters for its Intrusion Prevention devices based on the information it has validated from the bug hunter.

iDefense, which operates the iDefense Vulnerability Contributor Program (VCP), has a similar concept. The main difference is iDefense, after validating the information and notifying the software vendor for free, uses the information to notify its own client base and build workarounds until the vendor develops a patch.

"The VCP provides researchers with ways to get legally paid for the research they do," Doyle said. He noted the payments can vary from a couple hundred dollars to as much as $10,000.

The Mozilla Foundation, meanwhile, offers a $500 bounty for every serious security bug found in its software.

DeMott said his VDA Labs is not wedded to its business model and may be open to tweaking it.

"If this business model is not panning out the way we had hoped, then we may focus on government or commercial contracts," DeMott said. "I certainly won't turn down a contract."

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Can anyone say racketeering? Not surprised he worked for the NSA. VDA not doubt will be gone once they email the wrong target.
Posted by gravityfactory (18 comments )
Reply Link Flag
Very shady practice indeed.

Although I agree that bug hunters who discover critical flaws in software and systems should be compensated for their work, the means in which VDA goes about it's business seems like something out of a bad Mafia type movie.
Posted by SeizeCTRL (1333 comments )
Link Flag
Instead of an email why dont they just send a video in of a man in a black ski mask saying you have 10 days to give me $5000 or I'll release these pictures to the public.

What is the difference?
Posted by smilin:) (889 comments )
Reply Link Flag
Extortion? C'mon. Extortion is
having a monopoly product that is defective and riddled with bugs and then charging people for protection after you've released it. Flaws and all. Can you say Microsoft security products?

The fact is, software companies will release half-baked products and shoddy products because they can. All teh economic incentive is built in releasing unfinished product. Someone has to put the incentive back in for them to fix and clean up their products BEFORE they're released.
Posted by ordaj (338 comments )
Reply Link Flag
The email he sent after releasing the exploit is one of the most incredible displays of chutzpah I have ever seen. Honestely: telling someone that you had to damage their business because they wouldn't pay up, then offering them consulting services is something that wouldn't even have occurred to me. It seems akin trashing their car then offering a deal on bus tokens.

That having been said, offering exploits for a fee seems like a perfectly legitimate transaction to propose. After all, the knowledge of the exploit has value, and the public benefits when there is an incentive to find them so they can be fixed. I'm just not impressed with the methods used in this case.
Posted by wmorriss (6 comments )
Reply Link Flag
rude yes illegal no
isn't this the same thing antivirus programs do
buy for $60 then pay $20 monthly or it will let viruses eat your comp
Posted by torystark (8 comments )
Link Flag
The exploit is not worth $10000
I looked at the code. It just looks like it's tracking some info about the browser capabilities via a querystring on a GIF request. Invasive? Yes. Worth 10 grand, uh... no.

Or am I missing something in the JS code?
Posted by WildSignals (13 comments )
Reply Link Flag
To clarify why it's not worth 10K
LinkedIn would see the info the script collecting as a potential privacy threat, but not one that would threaten the business. The script is collecting client stats in the same manner most reporting tools for web servers do. In fact, the script might have been borrowed from one of those. It is limited to the DOM objects that JavaScript has access to in the browser. Screen height... oooooo. Do you have Java? OOOOOOO. Easy to shut this down.

A good programmer at LinkedIn could find it, patch it, and test it in an hour. Unless that person is making $5000-$10000 per hour, I agree with LinkedIn's decision.
Posted by WildSignals (13 comments )
Link Flag
VDA should be sued for this type of practice...
This type of practice by VDA definitely looks like extortion. If I find a company like Microsoft or others make crappy software and does not test their programs for bugs I will no buy them anymore. I really don't want the software industry being regulated by extortion schemes which threaten to release dangerous code if the extortionist is not compensated. A company who is treated in this way by VDA has every right to sue VDA in my opinion.
Posted by jeroneanderson (50 comments )
Reply Link Flag
two ways to see
I see this from the feeling of extortion but I also see it as someone who is frustrated with the lack of severity companies put on fixing their software. It's funny because most people here would barrage hate comments on a company who took a lax standpoint on fixing bugs in their software. This is almost akin to a bounty hunter going after a criminal and though you don't agree with their practices they certainly accomplished something others did not. If the only thing a software company understands is money and nothing of their own image or reputation then maybe they do deserve that type of business model/behavior to beleaguer them. Though this is certainly a more renegade behavior I am sure the "business model" will have to change into something a little less edgy over time as I am sure the eventual lawsuits will wear them down.
Posted by chuchucuhi (233 comments )
Reply Link Flag
Electronic Ransom!
Holding a company hostage for a sum of money.

Forcing them to pay to gain access to the flaws which are inherient in their software.

Threatening to go public if they don't ransom up!

Sad news if you ask me... but the problem lies not so much in their tactics as it does in the fact that it doesn't currently pay very much to divulge security flaws to the manufacturer.

Thus I understand the concept of trying to make that a more profitable solution... but the tactics stink to high heaven.

Posted by wbenton (522 comments )
Reply Link Flag
This is 100% extortion!. Look at the language VDA has used in their emails! There is a limit to amount of testing a software developer/company can do. They do their best and release the product. Big companies can afford to put more resources on testing but still the product will not be 100% bug free!

I am surprised why LinkedIn did not sue VDA! They should! I bet VDA would run for their life if sued!
Posted by slickuser (668 comments )
Reply Link Flag
extortion if they say "if you dont pay WE will release the attack code for gain against users."

Sharing knowledge on bugs is not a bad thing. Too bad someone did not share knowlede about the bad state of repair (bugs) of the bridge that collapsed.
Posted by gggg sssss (2285 comments )
Link Flag
Write good software or pay a fine! Excellent!
They deserve it, selling software full of bugs, make millions then consumers pay for their mistakes, and not just that, have a monopoly control the market, and year after year keep on saying that the next version is going to be good and then come out with another piece of junk.

If you drive over the speed limit you get a ticket, makes sense to fine the sloppy software maker. Why should they get the feed back for free.
Posted by gerardogerardo80 (28 comments )
Reply Link Flag
This is the criminal defintion of blackmail
This business model is the legal definition of blackmail, a form
of extortion:

<a class="jive-link-external" href="" target="_newWindow"></a>
selected=75&#38;bold=|||| says:
n. the crime of threatening to reveal embarrassing, disgraceful
or damaging facts (or rumors) about a person to the public,
family, spouse or associates unless paid off to not carry out the
threat. It is one form of extortion (which may include other
threats such as physical harm or damage to property).
See also: extortion

<a class="jive-link-external" href="" target="_newWindow"></a> says: BLACKMAIL - A
criminal act of extortion, malicious threatening to do injury to
another to compel him to do an act against his will. Usually
involves the threat to release information, often true, about the
person that will defame his reputation or bring criminal actions
against him.

The criminality lies not in the release of the information - at
least if true - but in the extortionate aspects of the threat to do

In fact, this business model may also violate Federal RICO (anti-
racketeering) regulations.

I see no difference between VDA's actions and that of the Mafia.

Anyone presented with a threat by this company should contact
their local FBI field office: <a class="jive-link-external" href="" target="_newWindow"></a>
Posted by AAPLBigot (4 comments )
Reply Link Flag
Sue their A@* off!
Yeah! Take action against VDA! Sue their a^* off!!!
Posted by slickuser (668 comments )
Link Flag
Why not patent the bugs and the bug fixes?
For those companies who don't want to pay up, why not patent the bug fixes as well? At least the non-paying companies will now have pay for the royalties of bug fixes. Patent trolls work exactly like that and has been very effective.
Posted by Joe Real (1217 comments )
Reply Link Flag
This is really troubling
The courts really need to look at this one. This strikes me as a less than legitimate way to do business.

Charles R. Whealton
Charles Whealton @
Posted by chuck_whealton (521 comments )
Reply Link Flag

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