UPDATE 2-LinkedIn suffers data breach

Wed Jun 6, 2012 6:49pm EDT

* Company confirms breach

* LinkedIn sent affected members emails to change passwords

* Expert says could take days to identify source

By Jim Finkle and Jennifer Saba

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

LinkedIn engineer Vicente Silveira confirmed on the site's blog that some passwords were "comprised." ()

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LinkedIn said it sent emails to members whose passwords were affected explaining how to reset them, since they are no longer valid on the site.

It could take several days, or up to a week, for LinkedIn to identify the source, said Mary Landesman, security researcher with Cloudmark, a company that helps secure messaging systems.

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 the 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.

With LinkedIn, computer security experts discovered files with some 6.4 million scrambled passwords on Tuesday, which they originally suspected belong to LinkedIn members because some of the passwords included the phrase "LinkedIn," said Graham Cluley, a senior technology consultant with British computer security software maker Sophos.

When Sophos dug further, it found other passwords on the list belonged to Sophos employees, who only used them to secure their LinkedIn accounts, he said. But it is possible that all or just some of those 6.4 million passwords belong to LinkedIn members, Cluley added.

The data was found on underground websites where criminal hackers frequently exchange stolen information, including scrambled passwords.

The files included only passwords and not corresponding email addresses, which means that people who download the files and 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 believed to contain the stolen 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 allows hackers to quickly unscramble all passwords after they figure out the formula by which any single password has 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 salt to each password before scrambling it.

"What they did is considered to be poor practice," Landesman said.

Silveira said in the post that affected members who update their passwords and those members whose passwords were not comprised "benefit from the enhanced security we just recently put in place, which includes hashing and salting of our current password databases."

Last year, a security researcher warned that LinkedIn had flaws that make users' accounts vulnerable to attack by hackers because of the way it manages cookies.

Cookies are small pieces of data sent from a website and stored in a computer user's Web browser. They are commonly used as a way to compile long-term records of individuals' browsing histories, and have raised concerns about privacy.

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.