The Washington Post February 24, 1995, Friday, Final Edition SECTION: Style; C01, , LAS LENGTH: 972 words HEADLINE: Media Notes; Computer Thief Scoop Nets Book Deal 9500011796: BYLINE: Howard Kurtz, Washington Post Staff Writer BODY: When FBI agents arrested fugitive cyberthief Kevin Mitnick in Raleigh, N.C., last week, it came as no surprise to computer buffs that New York Times reporter John Markoff was there. Markoff has covered Mitnick since 1981, when he was first arrested for breaking into a California phone company office. Markoff wrote a 1991 book with his then-wife, Katie Hafner, that focuses in part on Mitnick. Now he was scooping the world on the dramatic 2 a.m. arrest of a man who had single-handedly terrorized the Internet. Markoff's diligence may have paid off big time. His agent reached an agreement in principle with Hyperion yesterday for Markoff for a book on the case, and sources placed the deal in the $ 750,000 range. Markoff would write the book with Tsutomu Shimomura, the Japanese computer sleuth who cracked the case and emerged as a hero in Markoff's coverage. "It's a very compelling story and has number one bestseller written all over it," said John Brockman, Markoff's agent. He sent 12 publishers a one-sentence fax when Markoff broke the story and "the offers started pouring in." Brockman says 35 movie companies have also expressed interest in buying the rights. Markoff cautioned yesterday that the original offer was made to Shimomura. "I have not signed any piece of paper," he said. "I have not asked the Times if it's okay. I don't think it's a final deal until the Times signs off on it." Markoff's role in this whodunit has been controversial in some circles because he also became part of the story. His own electronic mail was twice broken into by Mitnick, making him a victim of the crime he was covering. "I don't know if I consider myself a victim," said Markoff, 45. "It's a squishy thing. . . . I was trying as hard as I could to be a reporter." Markoff says he didn't know that Mitnick was the culprit in his own e-mail theft -- which made his computer account accessible to anyone -- until days before the arrest. Markoff is listed as a victim in an FBI affidavit. Markoff has communicated with Mitnick by phone and e-mail over the years but never met him until the arrest. The reporter has long been close to Shimomura, who works for the San Diego Supercomputer Center. Last month he wrote about an electronic break-in at Shimomura's home computer, well before anyone dreamed how big the story would become. Markoff flew to Raleigh because Shimomura, believing he had tracked down the mystery hacker, had led authorities there. He and Shimomura stayed in the same hotel. "He had been a very good source of mine for a long time," Markoff said. Markoff, who is regarded by other technology reporters with a mixture of awe and admiration, says that while he traded information with Shimomura during the investigation, he provided only what was in his book. "They say I was part of the team, but I was never part of the team," he said. At one point in the probe, when he and Shimomura were at a telephone switching center, the FBI showed up. The agents "freaked out" at his presence and he quickly left, Markoff says. Markoff has described Shimomura in the Times as having "a deeply felt sense of right and wrong" and "an uncanny ability to solve complex technical problems in the manner of Star Trek's Vulcan Mr. Spock." Some Internet users suggest that Markoff hyped the story to boost future book sales. "A hero is vital . . . [to] give Mr. Markoff something to take to the bargaining table when selling his sequel," one cybercitizen said in a posted message. Times spokeswoman Nancy Nielsen said the paper would have to evaluate any Markoff book deal. "We're very proud of his work," she said. "He was a reporter doing what reporters do." Markoff says he is "stunned" by the worldwide attention being lavished on hisstory. His explanation: "There's a good guy, there's a bad guy, there's a happy ending."