It’s getting more and more expensive to be a player in the Cyber War arena. That’s because of the rising cost of ammunition, which is now often sold at auction. For years now Internet security efforts have been increasingly relying on lots of cash with which to buy information that can protect networks. That's because Cyber War (attacks on computer networks, usually via the Internet) works best using knowledge of current weaknesses in Internet software. This sort of thing is known as "Zero Day Exploits" (ZDEs). These are freshly discovered and exploitable defects in software that runs on the Internet. These flaws enable a hacker to get into other people's networks and PCs. In the right hands these flaws enable criminals to pull off a large online heist or simply maintain secret control over someone's computer for future gain or further mischief.
The problem with ZDEs is that there is far more demand than supply and most of them are soon eliminated as publishers fix their software. Criminals, Internet security companies, government Cyber War organizations, and major corporations (especially software developers) all bid on ZDEs. As more money is offered for ZDEs more people are getting into the ZDE finding business. Not only is there a lot more money offered for ZDES but there are now so many more ways to get paid. A lot of this is now above ground (legal). The most obvious aspect of this is seen by independent ZDE sleuths operating via an agent, who will get the best price and take a 15 percent commission. The criminals have to be the most imaginative because most of the legal bidders want to fix the ZDE so that it is no longer a threat. The criminals, and Cyber War outfits, want to use ZDEs to get into other people’s system. These groups do not let the software manufacturer know about the flaw in their products. The criminals are looking to make money, the Cyber War groups are doing their damage for less venal and more destructive reasons. Both need more ZDEs, and this has led to criminal gangs and Cyber War operations developing their own teams of ZDE sleuths and paying them well to only deliver their finds to one customer. The gangsters and Cyber Warriors both ensure loyalty via threats. The gangsters will kill ZDE searchers who sell to someone else, while the Cyber War groups can prosecute for treason. It’s a booming, lucrative, and occasionally dangerous business.
There are other players as well. Many ZDEs are specific to a particular website. That's because each website has some unique characteristics that creates ZDEs that are rare or only show up on that particular site. This is particularly true of heavily defended sites, like those of financial institutions or mega sites like Facebook. An increasing number of large sites, like Facebook, are offering rewards for ZDEs that enable hackers to harm Facebook and its users. Since a lot of Internet experts and hackers are Facebook users, there are a lot of qualified ZDE finders out there with multiple incentives to find and report Facebook vulnerabilities. But even Facebook security people realize that ZDEs are valuable commodities and you have to pay the going rate if you want to be a competitive buyer and protect your site. Thus, the "auction of doom" angle. If the potential payday is big enough even the biggest Facebook fan will be tempted to sell a very valuable ZDE that could do great damage to Facebook.
ZDEs are no longer found just on the hacker black market, which is the main reason the price has skyrocketed. The price of ZDEs varies a lot. That's because not all vulnerabilities are equal. Some are much more valuable than others because they are more effective or allow attacks on a larger number of targets. Commercial Internet security firms offer rewards to people (usually software engineers who spend too much time on the Internet) who first discover a "zero day vulnerability," as do governments and many other firms with a big interest in Internet security. The rewards for really good ZDEs can sometimes exceed a million dollars and come with bonuses (monthly payments for each month the ZDE is not fixed and still usable). The software publishers and commercial security firms, which provide services for corporate and government clients, offer the rewards openly. There is a more lucrative underground market, financed by criminals and some governments that offer even larger, although riskier, rewards.
The Internet users, especially large companies, get after the software publishers to find and fix the bugs (ZDEs) quickly. This often does not happen and fixing these known vulnerabilities often takes several months and sometimes as long as a year or more. This is largely because fixing these bugs is expensive and publishers don't want to risk creating new ones. The publishers know that every time they open their source code to repair something there is a high risk of creating more bugs. It's expensive to fix the bug, test the patched software, and then distribute it to their customers. Thus, unless the bug is highly likely to be exploited, it is not attended to right away. The problem with this approach is that the software publisher may not be aware of just how exploitable the bug is. Criminals and Cyber Warriors have an interest in finding ways to exploit bugs that appear relatively harmless. That turns the bug into ammunition, for the Cyber War, and a way to make money, for the criminals. Those protecting large or critical (banks, intelligence agencies) websites will usually fix problems very quickly. It's the software companies that don't have a similar incentive to move quickly.
For over a decade now Cyber War and criminal hackers have secretly placed programs ("malware") in computers belonging to corporations or government agencies. These programs ("Trojan horses") turn the infected PCs into "zombies" (or "bots") which are under the control of the people who plant them (the "botmasters"). Such control allows the botmaster to steal, modify, or destroy data or shut down the computer systems the zombies are on. You infect new PCs and turn them into zombies by using ZDEs, which is why these flaws have become a billion dollar a year business. A lot of those ZDEs go towards supporting the business of delivering spam. But mixed in with all the garden variety criminality is a lot of corporate and military espionage.
Cyber War commanders are resigned to the fact that they will have to use mercenaries if they want to survive any future Internet based conflict. Much use is being made of mercenaries right now in the race to build up stockpiles of munitions (ZDEs). In Cyber War the ammo is information. That is, knowledge of vulnerabilities in software connected to the Internet or major networks not connected to the Internet. It's feared that China actually has a lead in this area, a lead they will not discuss but that the victims know exists.