Approximately 700 web sites and 3,500 FTP accounts have been compromised at DreamHost in recent weeks, with crackers insetting invisible links to porn sites in the HTML code of the hacked pages. These invisible links are typically used to boost search engine ranking in Google, which uses links from outside sites as a key indicator of a site's popularity.

DreamHost clustomers began reporting the issue as early as May 23, but it wasn't until Tuesday that DreamHost began informing affected customers and asking them to change their passwords. The company said about 20 percent of the customers whose FTP accounts were compromised also had their web sites hacked.

Google and other search engines frequently ban sites from their rankings if they are found to be using invisible links, creating the possibility that the hacked DreamHost customers might have some explaining to do if their sites were indexed during the defacement.

Some of the porn sites were hosted at Atlantic Baptist Bible College, a Christian college whose home page now redirects to porn sites. Universities and other .edu domains are popular for use in black-hat search optimization strategies because links from these sites are given extra authority in Google's algorithms.

"We’re still working to determine how this occurred, but it appears that a 3rd party found a way to obtain the password information associated with approximately 3,500 separate FTP accounts and has used that information to append data to the index files of customer sites using automated scripts (primarily for search engine optimization purposes)," DreamHost wrote in its email to customers.

"In the last 24 hours we have made numerous significant behind-the-scenes changes to improve internal security, including the discovery and patching to prevent a handful of possible exploits," the company said.