From the paper:
The question we ask here is how easily and how effectively a phisher can exploit social network data found on the Internet to increase the yield of a phishing attack. The answer, as it turns out, is: very easily and very effectively.When they received the e-mail to go to this non-University website, 349 of the 487 students targeted provided their University username and password. Remarkable and frightening.
Our study suggests that Internet users may be over four times as likely to become victims if they are solicited by someone appearing to be a known acquaintance.
To mine information about relationships and common interests in a group or community, a phisher need only look at any one of a growing number of social network sites, such as Friendster (friendster.com), MySpace (myspace.com), Facebook (facebook.com), Orkut (orkut.com), and LinkedIn (linkedin.com). All these sites identify "circles of friends" which allow a phisher to harvest large amounts of reliable social network information.
The experiment spoofed an email message between two friends, whom we will refer to as Alice and Bob. The recipient, Bob, was redirected to a phishing site with a domain name clearly distinct from Indiana University; this site prompted him to enter his secure University credentials. In a control group, subjects received the same message from an unknown fictitious person with a University email address.
The 4.5-fold difference between the social network group and the control group is noteworthy. The social network group's success rate (72%) was much higher than we had anticipated.
The paper contains other interesting details such as differences in success rates according to field of study and gender of sender and receiver.
See also a Google Tech Talk on Google Video, "Badvertisements: Stealthy Click Fraud with Unwitting Accessories", by Markus Jakobsson, one of the authors of the paper, that discusses this phishing study and some of his other work on click fraud.