Yep, after Yahoo! and Google also Microsoft's CAPTCHA have been broken ! A report of CAPTCHA cracking research has been released by Newcastle University.
The researchers achieved a 92 per cent success rate in cracking Microsoft CAPTCHAs, which mix distorted characters with randomly placed arcs. The technique employs a sequence of simple graphical manipulations based on the properties of the CAPTCHAs, including contrast enhancement, transverse histogram analysis for character segmentation, pixel counting for arc elimination and colour filling for character boundary detection. A demonstration written in non-optimised Java took less than 100ms per CAPTCHA on a 1.8GHz PC.