In this work we attempt to develop a game theoretic model that can indicate the nuances of strategic investments in the face of possible cyber terrorist attacks. First, we briefly review the literature on terrorism. Second, we identify the „cyber‟ factors in terrorism, and how this new mode of attack alters the general scenario. Then, beginning with a naïve counter terrorism model, we incrementally incorporate the factors of cyber terrorism to develop our game theoretic model. Our current work is geared towards developing a model that can adequately incorporate the cyber factors of today‟s networked economy. In this report, we have also discussed some preliminary insights of (countering) cyber terrorism from the proposed model. This is a research in progress; and we have not yet analyzed the model in its entirety to realize the whole range of conceivable insights.