Facebook vs LilyJade: Malware, Worm, or Internet Marketing Network?

Facebook vs LilyJade Continues as FB Stock Remains Below IPO Price Level

Staff Report

PHOENIX, AZ - No, LilyJade is not an escort or exotic massage therapist, it is an application that some are calling malware. While Facebook lawyers have sent a cease and desist to the creator of the app, Dru Mundorff, who has said he is going to fight it as what he is doing is not illegal.

According to WGNT in Phoenix, “It is legal right now,” said Aaron Kelly, an attorney who has represented several internet startups who have gone toe-to-toe with Facebook. He has also offered to help Mundorff.

Kelly has talked about the legalities of LilyJade on his blog recently, with other interesting posts like PageRage vs Facebook that are similar in nature.

Meanwhile, Sharon Hurley Hall at Midsize Insider wondered, "Does Facebook Worm Signal Malware Risk for Social Businesses?" She wrote:

This piece of malware, called LilyJade, can mimic advertisements on Facebook--and Google, Yahoo, YouTube, Bing, and AOL. When users click on or view the ads, the malware developers gain affiliate earnings. The malware spreads by infecting browsers and using active Facebook sessions to spam other users. When users follow the links in the messages they get from trusted users, they then load an exploit kit called the Nuclear Pack into a hidden iframe. This type of malware is not an isolated incident. On SecureList, Sergey Golovanov describes it as an example of "Malware 2.0," where malware writers are using the most up-to-date web technologies to spoof services, spread their malware, and earn income.

Whether you consider LilyJade as malware or the next big thing for online advertising, it is going to be interesting to watch a social network company that is valued at many times their revenue battle a small developer who has been able to cash in with a little ingenuity.

About a week ago, Facebook COO jokingly asked Harvard students to go "click some ads" on the social network. While that may have been a joke (or an attempt at one), the FB network is facing an alleged click fraud problem with their advertising. This is not good news as the company is facing at least two lawsuits and is struggling to increase revenue for shareholders.

Mundorff used Crossrider, a cross-browser extension development framework, to build a program called LilyJade that spreads on Facebook, and other social networks like Twitter according to security researchers from antivirus firm Kaspersky Lab.

"It is quite rare to analyze a malicious file written in the form of a cross-platform browser plugin. It is, however, even rarer to come across plugins created using cross-browser engines," Kaspersky Lab malware expert Sergey Golovanov said online recently.

The Register UK noticed the problem, which they wrote about, saying:

Facebook offers pay-per-click advertising to small self-serve advertisers, who have begun complaining of a ramp-up in click fraud on an even greater scale. An online forum at WickedFire is littered with complaints, many alleging that Facebook is charging for clicks in excess of those recorded by server logs, Techcrunch reports.

"We take click quality very seriously and have a series of measures in place to detect it," a Facebook spokesman told Techcrunch recently. "We have large volumes of data to analyze click patterns and can identify suspicious activity quickly.

"Over the past few days, we have seen an increase in suspicious clicks. We have identified a solution which we have already begun to implement and expect will be completely rolled out by the end of today.

"In addition, we are identifying impacted accounts and will ensure that advertisers are credited appropriately."