Online crime costs rising.

A new survey reveals that online criminals are attacking corporate and government networks more frequently, and it cost businesses an estimated $666 million in 2003.

The survey of 500 computer security executives recently conducted by CSO magazine in cooperation with the U.S. Secret Service and the CERT cybersecurity center at Carnegie Mellon University in Pittsburgh found that more than 40 percent of those polled said hackers have become the biggest cybersecurity threat to businesses and government networks, compared to 28 percent who feared internal threats such as disgruntled or recently fired employees. More than 40 percent of those polled also said the number of computer crime incidents increased from 2002 to 2003.

The rise in the number of executives who fear hackers marks a shift in corporate attitudes toward security, according to CSO. Historically, businesses have focused on internal threats as their biggest risk--36 percent of respondents said they monitor employees' Web use and other activities to prevent internal sabotage and leaks. Nearly 100 percent of those surveyed said they use firewall software in their corporate networks, and more than 80 percent use encryption and similar technology to protect their electronic transactions.

But experts warn that companies must not shortchange their cybersecurity defenses. A Department of Homeland Security report from industry executives and cyber security experts recommended in April that auditing firms should include cybersecurity readiness as part of the criterion for determining whether companies have adequate internal and financial safety controls. (Editor's Note: See related article on page 36.)