Yahoo CAPTCHA Hacked
Hell Yeah! reminds us of a 2-week-old development that somehow escaped notice here. A team of Russian hackers has found a way to decipher a Yahoo CAPTCHA, thought to be one of the most difficult, with 35% accuracy. The Russian group's notice, posted by one "John Wane," is dated January 16. This site hosts a rapidshare link to what looks to be demonstration software for Windows, and quotes the Russian researchers: "It's not necessary to achieve high degree of accuracy when designing automated recognition software. The accuracy of 15% is enough when attacker is able to run 100,000 tries per day, taking into the consideration the price of not automated recognition — one cent per one CAPTCHA."
33% of Yahoo capitchas isn't really impressive - you still get a large quantity of negative hits, and unless you have an array of IP addresses (most people don't), there will still be a large quantity of addresses registered from a given IP. Also, a large quantity of negatives would cast doubt on any positive matches from the same IP.
Also, Yahoo captchas aren't that "hard" - they are black text from known font pools on a white background that get slightly warped and have black lines drawn on some characters. This is hardly strong since it doesn't hit all letters within the word (which is done by reCAPTCHA) or use a large font-pool variety.
Even the Slashdot Captcha is harder - it hits the whole image and uses different fonts within the word.
Hence all good modern captchas have moved away from character recognition captchas (such as yours) to segmentation based captchas. You only need to read the wikipedia article on CAPTCHAs to see some examples: http://en.wikipedia.org/wiki/Captcha.
http://news.bbc.co.uk/2/hi/technology/7067962.stm
Here is a link to a BBC article about something like that. It's a Windows program that rewards typing in captchas by showing a woman that takes off progressively more and more clothes.