According to the hmm… press-release (formally, it’s a blog entry, but the style is very press-releasish), the Yahoo CAPTCHA is broken.
According to many specialists, this is a hard CAPTCHA for machine recognition. Anyway, the developers (they call themselves “Network Security Research and AI group”) designed a system with the recognition rate about 35%.
They don’t reveal the algorithm. The only detail is that the tool uses uses MATLAB 2007a Compiler Runtime.
The code is freely available for download.
The developers notified Yahoo, but haven’t got a reply so far.