The 203MB file contains the code that appears to be from Microsoft's enterprise operating system, but the code is not complete, said Dragos Ruiu, a security consultant and the organiser of the CanSecWest security conference, who has examined the file listing.
"It was on the peer-to-peer networks and IRC (Internet relay chat) today," Ruiu said. "Everybody has got it; it's widespread now."
The 203MB file expands to just under 660MB, he said, noting that the final code size almost perfectly matches the capacity of a typical CD-ROM. The entire source code, he said, is believed to be about 40GB, meaning that the file circulating Thursday would be only a fraction of the full code base--if it is authentic.
Ruiu, who has seen the file, believes it to be authentic. "It looks real," he said. "You can't build Windows, however. It's just a bunch of chunks of the operating system."
Microsoft said it is looking into claims that file traders were swapping its proprietary source code.
"The rumour regarding the availability of Windows source code is based on the speculation of an individual who saw a small section of unidentified code and thought it looked like Windows code," Microsoft said in a statement provided to CNET News.com. "Microsoft is looking into this as a matter of due diligence."
Earlier Thursday, a source located a file purporting to be the code on a Web site, but the file was removed from the Internet before it could be completely downloaded.
The potential that the source code has been released has some security experts worried.
"It's definitely not a good thing if black hats have the source code," said Oliver Friedrichs, senior manager with antivirus company Symantec's security response center. If the source code as been released, "the underground can look at the code without legitimate security researchers being able to find vulnerabilities first."
But Microsoft downplayed any security issue.
In its statement the company said the main concern is the potential theft of its handiwork rather than the possible security threat that such a leak might pose.
"If a small section of Windows source code were to be available, it would be a matter of intellectual property rights rather than security," Microsoft said.
Microsoft jealously guards the source code to the various versions of its Windows operating system, sharing it only with universities and government agencies that sign agreements not to release the code. While working versions of Microsoft's operating system have occasionally leaked to the Internet, actual source code leaks have been rare.
Although Microsoft chairman Bill Gates has publicly bragged about the security of Windows, even Microsoft fears the release of its code. In testimony during the Microsoft antitrust trial, Jim Allchin, the company's senior vice president for Windows, said opening up the company's source code could be devastating for the operating system's security.
"The more (that) creators of viruses know about how antivirus mechanisms in Windows operating systems work, the easier it will be to create viruses or disable or destroy those mechanisms," Allchin testified during a May 2002 antitrust trial.
Allchin made the statements while defending the company against legal remedies supported by nine states that would have compelled Microsoft to giveaway the source code to Internet Explorer.
Allchin's fears are not misplaced, said Thor Larholm, senior security researcher with security consultancy PiVX Solutions.
"Just look at the amount of vulnerabilities that are discovered without the source code," he said. "The majority of Windows servers are still running Windows 2000. Furthermore, Windows 2000 has a lot of shared code that is still being used by Windows XP and Windows Server 2003."
However, other security experts believe that fears about a leak leading to the widespread discovery of vulnerabilities in the code are misplaced.
"Theoretically, to a good reverse engineer, all code is open source," said a Microsoft security consultant who asked not to be identified. He added that the size of the compressed file that was being passed around the Internet sounded about right.
In the end, however, the mistake that made Microsoft's code public might result in benefits similar to open-source code, Ruiu said.
"Short term, there might be problem (as bugs are found), but long term it might be good for them," he said. "Their code might become more secure."
Why is everyone so concerned about possible security issues in windows being discovered because the source code is now freely available???
It is more likely that by having so many people looking at the code (regardless of the integrity of the viewer) that Microsoft will become aware of more of the possible security issues in their code and make a better operating system for all.