The security breach in Hotmail that Microsoft says it was only informed about early Monday morning had been discussed for some days in hacker circles. It was written on 7 June and had been "in the wild" since then, so clearly Microsoft is not very vigilant in what is going on in the hacking world. The Register tested and verified the chink in Hotmail's armour yesterday. Despite Microsoft's claim that "the issue has been resolved and MSN Hotmail is currently operating normally" it was still possible to look at private email hours later because Microsoft was still fixing each server. But surely SMS was supposed to be able to propagate fixes like this? Microsoft's problem appears to be in its back end. Certainly Yahoo was gloating that Yahoo Mail doesn't have "back-door entry". The hack is apparently the work of eight hackers at "Hackers Unite" in Sweden, who claimed: "We did not do this hack to destroy, we want to show the world how bad the security on Microsoft really is". The hack was first reported by Swedish newspaper Expressen and was mirrored quite widely. Microsoft PR called the problem a "service issue" and claimed that "very advanced knowledge of Web development languages" was needed to accomplish the hack, but those who know about these things, like Richard Smith of Phar Lap, had a different view: "It's trivial," he said, "it's just some HTML code." It appears it was just nine lines of code it turns out. Microsoft has been very secretive about moving the bought-in Hotmail from Unix to NT. It is however likely that dozens if not hundreds of additional servers are being deployed. Hotmail response time was diabolically poor until a couple of months ago when additional servers were deployed. The value of Microsoft dropped several billion dollars yesterday, but the real damage is to Microsoft's credibility in ecommerce and the enterprise. ®