>From EE Times:

http://www.eet.com/story/OEG19990622S0026

Algorithm hides data inside unaltered images
By R. Colin Johnson 
EE Times
(06/22/99, 4:29 p.m. EDT) 

ORONO, Maine  Information can be hidden inside images without altering
their appearance, according to University of Maine professor Rick Eason.
In a patented algorithm he developed with Eiji Kawaguchi, a professor at
the Kyushu Institute of Technology, Eason shows how to embed secret data
messages within the "extra" bits of a normal bit-mapped image, which can
be decoded with special software. 

The new 'steganography' method hides data using a software encoder that
preprocesses the image. The embedded data, which can store audio data, for
example, is stored in specific portions of the image that the software
encoder chooses on the fly. A matching decoder, at the receiving end,
finds the hidden data and separates it from the image. 

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