How Internet Explorer 8's SmartScreen looks at URLs?

IE8’s SmartScreen's reputation systems bring together the telemetry, feedback, and protection of several of Microsoft's major Internet services and tools. Conceptually, the work of SmartScreen's reputation systems results in a huge database of information about abuse on the Internet. “We ship information from this database, on a near-real-time basis, into a large number of Microsoft […]

IE8’s SmartScreen's reputation systems bring together the telemetry, feedback, and protection of several of Microsoft's major Internet services and tools. Conceptually, the work of SmartScreen's reputation systems results in a huge database of information about abuse on the Internet. “We ship information from this database, on a near-real-time basis, into a large number of Microsoft products and services, including: Windows Live Hotmail, Internet Explorer, Bing, AdCenter, Exchange, Microsoft Security Essentials, and more. Each of these services implements some of their safety features based on SmartScreen's reputations. In the case of Hotmail, the results are used to determine if incoming e-mail messages should be delivered to our customers. Our goal is that Hotmail customers never see messages linking to known phishing, malware, and spam sources. In other scenarios, like when a customer types the URL for a known malware site into the address bar in Internet Explorer, SmartScreen provides a visual warning,” stated Microsoft.

Conceptual cost pyramid for Internet abuse     Conceptual architectural diagram of phishing reputation