The BadNews malware debate continues to be batted back and forth, with Lookout, the company that first raised the alarm, maintaining that it is malware in the face of Google's assertion last week that it had seen no malicious activity associated with apps carrying the malware.

In conversation with The Register, Lookout's security product manager Jeremy Linden said the company not only remains confident that BadNews is malware, but that the security vendor is seeing “evolution of the code base”.

When BadNews was discovered, Lookout said it was present in 32 apps on Google Play which, combined, had been downloaded millions of times.

Last week, Google told a security conference “it had no evidence that BadNews was playing a part in the distribution of SMS-borne frauds”, adding that “we haven't seen a single instance of abusive SMS applications being downloaded as a result of BadNews”.

Linden has now told The Register that “Our analysis confirms that BadNews does prompt the user to install a malware application,” but that it was written “to avoid detection”. It remains quiet most of the time, he said, only becoming active for a few minutes at a time.

“There's a high possibility that Google hasn't seen it sending malware,” Linden told The Register. “We have systems that act like they're infected clients, so they can sit on the malware networks and log malicious traffic.

“We are still seeing traffic from BadNews and we're seeing an evolution of the code base.”

He said that BadNews' operators are “adding features” to increase the malicious activity of the malware, and said Lookout believes “the same developers are behind other explicitly malicious code.”

The Register invited Google to provide comment for this story, but has received no response. ®