The flaw gave hackers a way to read and steal e-mail messages from Hotmail users, and according to security vendor Trend Micro, that's exactly what they did, sending specially crafted e-mail messages to several thousand victims.
On May 12, Trend Micro found a message sent to a victim in Taiwan that looked like a Facebook notification alert. The Chinese-language e-mail seemed to be warning victims that someone had accessed their Facebook accounts from a new location.
In fact, it was a ruse. Buried inside the e-mail message was a specially written script that forwarded the victim's e-mail messages to the hacker.
For the attack to work, the victim had to be logged into Hotmail, but the script would run even if the victim simply previewed the message. The attack worked because Microsoft had a common Web programming error, called a cross-site scripting flaw, on its website.
"The script triggers a request that is sent to the Hotmail server," Trend Micro wrote in a blog post describing the issue. It then "sends all of the affected users email messages to a certain email address."
Cross-site scripting flaws are easy to find on the Web, but they're rare in important, widely used websites such as Windows Live Hotmail.
Trend Micro reported the issue to Microsoft immediately, and it was finally fixed on Friday, according to Microsoft. It's not clear how many Hotmail users were hit by the attack.
According to Trend Micro, the attack doesn't seem to have been widespread. The company was able to count between 1,000 and 2,000 victims after discovering the issue, said Jamz Yaneza, a Trend Micro research manager. However, Trend Micro has no way of knowing how long the flaw was there before it was uncovered, he added.