Once the hobby of nerdy whiz kids, computer hacking (search) has become a multibillion-dollar criminal enterprise.

Shadowy gangs of hackers have attempted to shake down huge companies by threatening to crash their online business if they don't fork over tens of thousands of dollars. And while early targets were gambling and porn Web sites, recent victims include the likes of eBay, Amazon and Microsoft.

"We're in an arms race, pure and simple," said David Whetheral, an associate professor of computer science at the University of Washington (search). "Denial-of-service attacks ... five years ago weren't a big issue. But they've grown to be a daily occurrence."

Most victims won't talk to the media, but Sporting Index, an online betting company based in the United Kingdom, told FOX News it was targeted by a Russian gang.

Hackers threatened to cripple the company's Web site if it didn't fork over $10,000. A few weeks later the criminals made good on their threat, costing the company 10 times the ransom in lost revenue.

Some companies have opted to pay up.

"I think they mistakenly believe that if they pay off some hacker that they're going to go away. But that simply is not the case," said federal prosecutor Arif Alikhan.

Despite a federal counter-attack launched a couple years ago, prosecutions are rare. Saad Echouafni (search), a business owner, was indicted last year for allegedly hiring a cyber-mercenary to hack his competitors.

Some researchers feel the only long-term solution is a complete overhaul of the World Wide Web, with more emphasis on security.

Click on the video box above for a complete report by FOX News' Dan Springer.