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  1. #1
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    Spyware is invading our virtual space
    Commentary: Honest marketing is worth fighting for

    By Bambi Francisco, CBS.MarketWatch.com


    SAN FRANCISCO - The hullabaloo over Google's attempt to advertise to you based on reading your e-mail is absurdly overblown. If you don't like it: don't sign up for it.

    You have a choice.

    By contrast the makers of invidious spyware do everything possible to avoid detection.

    When software clients that you don't sign up for end up residing on your desktop and shooting off advertisements like a revolver, well, that's not only worth railing about, it's worth fighting against.

    My home computer has been on its deathbed because of the proliferation of pop-up advertisements that have overtaken it. In the last six months or so, my computer has warned me incessantly that my PC was possessed with so-called spyware.

    Earlier this month, a company called Claria Corp. filed for an initial public offering. You may be familiar with its prior name: Gator. The online ad company's filing comes at a noticeably opportune time as shares of online ad companies, like Yahoo, InfoSpace, Ask Jeeves, and ValueClick have been on fire lately.

    Redwood City, Calif.-based Claria makes software that installs onto a consumers' computer and then targets consumers with advertisements, like pop-ups and pop-unders.

    In Claria's S-1, the company description of its business is far more euphemistic. It says that Claria pioneered an "online behavioral marketing platform that enables us to deliver, manage, and analyze highly-targeted online advertising campaigns."

    If "highly-targeted" means the advertisements reached consumers who were amenable to those ads, then I, beg to differ. I'm not highly target-able, or receptive. I'm highly annoyed.

    I feel personally aggrieved that Wall Street is considering a capital financing to fuel this type of advertising. It seems bankers and Claria care more about the ends -- the money -- than the risks. Claria is trying to go public with a host of outstanding lawsuits against it.

    Deutsche Bank Securities, Piper Jaffray, SG Cowen, and Thomas Weisel Partners are underwriting the deal which aims to raise as much as $150 million.

    Claria is not profitable, but annual sales more than doubled to $91 million in 2003. Nearly a third of Claria's sales come from search advertisements through Yahoo's Overture that are displayed on Claria's Searchscout, an atypical search engine. Visitors don't go to Searchscout intentionally. They're typically pushed to the site, according to ComScore, an Internet research company.

    Claria would not comment about its business.

    But some of the most interesting reading in its S-1 filing with the SEC is in the 14 pages about risks confronting the company. While Claria does not say explicitly that its technology is spyware, it comes close to admitting it.

    Spyware is often defined as "software installed on consumers' computer without their informed consent that gathers and may disseminate information about the consumers, including personally identifiable information, without the consumers' consent," according to Claria's S-1.

    In adds that "future legislation intended to regulate spyware could bring some or all of our services within its purview, which could prevent us from operating or distributing some or all of our services or which could require us to change our business practices." Additionally, the S-1 says that software programs marketed as ad-ware or spyware detectors by Symantec (SYMC: news, chart, profile), Time Warner's (TWX: news, chart, profile) AOL, and EarthLink (ELNK: news, chart, profile) notify consumers when Claria's technology is installed and prompts consumers to "uninstall such software."

    Trademark infringement case

    In May of last year, Wells Fargo (WFC: news, chart, profile) joined LL Bean, Hertz, Six Continents/Intercontinental Hotels, who had already filed suit against Claria, alleging trademark and copyright infringement, among other things. A trial is scheduled in February 2005.

    According to Wells Fargo, Claria's strategy is a "Trojan-horse concept." Claria gives away free software that appears innocuous, but in fact, "infiltrates the personal computers of unsuspecting users to perpetrate its unlawful pop-up advertisings scheme," according to the suit.

    Wells Fargo alleges that consumers who signed up for various personal finance service online, such as e-Wallet, unknowingly had Claria's Gain AdServer installed on their computers.

    Subsequently, Wells Fargo customers would receive pop up ads from competing banks, such as Bank of America, while they were visiting Wells Fargo's own web site.

    In effect, Claria sells advertisements to be displayed on Web sites, like Wells Fargo, without the permission of or payment to such Web sites.

    Terry Ross, an attorney representing Wells Fargo in its suit, said if there is confusion on the part of consumers, Claria can be charged with trademark infringement.

    "There has to be consumer confusion," he said. The way to prove that, he argues, is through surveys or consumer complaints.

    In a study conducted by New Jersey-based consumer research outfit D-Squared, 40 percent of those responding believed that the underlying Web site was responsible for the pop-up advertisements seen on a web site.

    In Ross's opinion, the survey "indicates that [Claria] purposefully put products next to our trademark in order for people to think that their pop-up ad is affiliated with Wells Fargo."

    Why then can generic drugs play off brand names and be offered on the same shelf in your neighborhood grocery store?

    There isn't this confusion in the three-dimensional world, said Ross, but online people assume pop-ups come from the particular Web site they're visiting.

    Invasion of spyware

    So how did spyware get in my computer? I'm assuming it was attached to KaZaA, the file-swapping software I've downloaded, oh, many times over the last couple of years. KaZaA, which is owned by Sharman Networks, signed an agreement with Claria in September 2003, to add Claria's Gain AdServer software to KaZaA's software.

    "We currently acquire a substantial portion of our new users through downloads of the KaZaA Media Desktop. We expect that our relationship with Sharman Networks will continue to be responsible for a substantial portion of the new installations of our Gain AdServer software in the future," Claria noted in its S-1.

    Of course, Claria is not the only company pursuing this type of menacing pop-up ad technology. There are others, such as WhenU.com. And, if I had paid for the $29.95 version of KaZaA, or if I read the fine print when installing it, I might have avoided the pop-up blizzard altogether.

    But it's not just being a smart consumer.

    We're moving beyond the wild west of the World Wide Web. There should be some protection and controls, like those established in Utah recently.

    The state enacted legislation, effective May 3, that makes the delivery of contextual ads illegal and imposes substantial new requirements that apply to the online distribution of software such as Claria's.

    It's a slow process, I know. Federal lawmakers and regulators are still trying to figure out how to proceed. The FTC held a panel discussion on Monday to discuss the effects of spyware.

    "There doesn't seem to be clearly articulated guidelines [about legal and illegal uses], but it's a slippery slope," said Greg Stuart, the CEO of the online advertising industry trade group, IAB, who attended the FTC hearing Monday.

    He also adds that because of the litigation, he doesn't see "Claria as being a bellwether IPO for the advertising industry."

  2. #2
    ABW Ambassador Andy's Avatar
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    Good article. It's nice to see more and more stories published about the negative aspects of this garbage. As public awareness increases, so will the level of outrage, especially when the end users finally figure out it isn't the websites they're visiting serving all the pop-ups!

    Andy

  3. #3
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    It will be interesting to see the outraged consumers demand the Ad Whore BHO's get blown out of the water with their browser spam. Heck the privacy invasion issues, identity theft, security holes and BHO popups fighting each other for system resources will doom these buggers. Hope the silent networks take it in the shorts for birthing, automating and monitizing these rogue affiliates.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  4. #4
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    There is a big blitz going on now that they had the workshop.
    http://story.news.yahoo.com/news?tmp...pcworld/115735

    Now is the time to show these articles to merchants and ask them if they want to be associated with this scum.

    Chet

  5. #5
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Great article and yes the media is hot to pick up on this BHO adware/spyware problem.

    Great articles and links to legit spyware/adware detection and removal software is at www.Ecomcity.com/news.htm Since I put this up my shoppers have written their systems speed up and the damn popups from the commission parasites cease. I highly recommend Ad-Aware, SpyBot R&D, Spywareblaster, Spywareguard. Stay away from those sponsor advertising listing at Google and Yahoo as most are just scammers and actually install trojan horse backdoors to fill your system up with their own spywarez and Adwarez after taking your money.

    Beware for the e-mail links leading to drive-by installs buried amongst those popup hellholes.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  6. #6
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Emily Kumler, Medill News Service

    WASHINGTON-- Spyware and adware are rivaling viruses as online pests, but not only consumers are concerned: Vendors and ISPs, who field the brunt of complaints, are gearing up for a fight.


    "In the past 8 months we've counted 40 million incidents of nonviral 'malware' and since March, 11.4 million cases have been detected," said Bryson Gordon, senior manager in charge of antivirus vendor McAfee's line of consumer products and services. Like many antivirus vendors, McAfee has added spyware protection. "With 4.2 million Web dialers, nonviral threats are very serious concerns for consumers."


    Gordon joined a panel of vendors and experts on spyware, adware, and privacy at a Federal Trade Commission workshop Monday. Participants aimed to define and understand the security risks and industry costs of such programs, which are proliferating.



    Draining Resources

    Nonviral threats were the number one reason consumers called Dell's tech support last year, said Maureen Cushman, one of three primary legal contacts for Dell's consumer business segment.


    "They represented 12 percent of all tech support," she said. "Data shows that spyware calls are longer and require much more troubleshooting. Usually the complaint is that the computer is performing slowly. This slowness is often perceived as a hardware problem, which hurts our brand."


    Consumers do not understand the differences among adware, spyware, worms, and viruses--and the lack of knowledge costs ISPs huge amounts of money, said Austin Hill, executive vice president and cofounder of Zero-Knowledge. The company works with ISPs on security issues.


    "The typical 25-minute calls mean a difference in cost of $15; that can wipe out an ISP's entire margin," Hill said. "People call their ISP angry and frustrated that their Internet is doing something unexpected. They assume it is the ISP's fault. Some are moving away from broadband and back to dial-up because they feel they didn't have the same problems with dial-up."


    John Gilroy, columnist with The Washington Post, called the lack of consumer awareness the most frightening aspect of the problem. While cleaning out a friend's computer, he discovered a spyware file holding 3GB of information.


    "Anti-spyware in the machine can appear to work properly, and then in the background there's this file, three gigs of information stored away, just sitting there," Gilroy said.



    Fighting Back

    Consumers are at a greater disadvantage at fighting spyware than businesses, panelists agreed. That's because companies usually have technology departments that can address spyware problems.


    "Is it worth it to pay someone to fix it? I've talked to people who think they need a new computer because their machines are so loaded with this stuff," Gilroy said. But the average consumer searches Google for anti-spyware software will find a bewildering selection of thousands of possibilities, he added.


    "But what they don't realize is that a ton of those companies are actually spyware," he said. "The typical consumer solution can be harmful itself."


    Roger Thompson, vice president of product development at PestControl, suggested part of the problem is a new type of hacker.


    "Viruses are normally written by one of two types of guys. One of those guys usually grows up, gets a job or a girlfriend and they stop. But guess what? The adware type is backed by a whole company. This is profit-driven, so when will they stop?"


    Gordon called that type of work "worms-for-profit."





    "There is a new type of motivation," he added. "It's not to show off to friends. Now it is to send out spam, fishing scams, Internet worms, and to hijack pages for profit."

    But adware "is trying to be a legitimate application," Thompson said, answering critics and skeptics.

    Gordon agreed with Thompson, but cautioned that the increasing dissemination of adware will make it a target for hackers and viruses.

    "With more than 100 million installations of adware, and we see those numbers increasing, I guarantee we see virus writers taking notice," Gordon said.

    Followup articles ....

    http://yahoo.pcworld.com/yahoo/artic...,115700,00.asp
    ...."Think spyware isn't spreading? According to a new report from EarthLink and Webroot Software, there's an average of almost 28 spyware programs running on each computer. More serious, Trojan horse or system monitoring programs were found on more than 30 percent of all systems scanned, raising fears of identity theft.............


    Utah has become the first state to make spyware a crime, passing a law that makes it illegal to install such programs on a PC without approval.

    Starting in early May, violators face a fine of $10,000 per incident, under the new Spyware Control Act. The Utah law aims to regulate the use of spyware and other advertising software, which is infamous for annoying computer users by tracking and reporting their Web whereabouts and displaying ads............. http://yahoo.pcworld.com/yahoo/artic...,115527,00.asp

    WASHINGTON, D.C. -- A handful of tech-savvy senators are tackling the growing problem of spyware with a proposed law that would make it harder for sites to inflict the invasive programs on unwitting users, and easier for the recipients to remove them.

    The Software Principles Yielding Better Levels of Consumer Knowledge (SPYBLOCK) Act would "give consumers control over the programs that are downloaded onto their computers," says cosponsor Barbara Boxer (D-California). The measure was introduced Thursday by Boxer and Senators Ron Wyden (D-Oregon) and Conrad Burns (R-Montana).......

    Great article ..."Escape the Spyware Nightmare
    Spyware and adware are the newest threats to connected PCs. Here's how to get them off your machine--and keep them off. ....
    http://yahoo.pcworld.com/yahoo/artic...,111630,00.asp
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  7. #7
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    I'm too lazy to read the articles.. do they also consider the CJ, BF, LS tracking cookies as spyware? I notice spybot S&D flags them for deletion.

  8. #8
    pph Expert! Gordon's Avatar
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    I'm too lazy to answer
    One day parasites and their ilk will be made illegal, I bet a few Lawyers will be pissed off when the day comes.
    Mr. Spitzer is fetching it nearer

    YouTrek

  9. #9
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    All these guys thin CJ-BF-LS cookies are spywarez. I invited these guys to come here as you all should to see if they'd remove the network cookie blockers so we can push their program on our sites.


    The most important step you can take is to secure your system. And SpywareBlaster is the most powerful protection program available. Prevent the installation of ActiveX-based spyware, adware, browser hijackers, dialers, and other potentially unwanted pests in Internet Explorer. Block spyware/tracking cookies in Internet Explorer and Mozilla/Firefox. Please support sites like EcomCity.com who earn commissions from recommending trusted merchants for savvy shoppers. Be sure to not check off auto removal of these cookies... Bfast (BeFree merchants) all Commission Junction cookies and those from Linksynergy (Linkshare) or I'm out of business. The sale commission tracking cookies set from our merchant links are NOT SPYWARE.

    SpywareBlaster can help keep your system spyware-free and secure, without interfering with the "good side" of the web.And unlike other programs, SpywareBlaster does not have to remain running in the background. SpywareBlaster is freeware for personal and educational use.

    > Download SpywareBlaster 3.1 ...details http://www.javacoolsoftware.com/spywareblaster.html
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  10. #10
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    The new 180Solutions nCase mascot was trapped inside my system this morning. Should I hold the bugger for ransome or feed him to Charlie? 10-X magnification ...looks mean and smells like a skunk. Gordo would probably use him as fish bait or try to slip him down the back of Ms.B's dress in Vegas..

    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  11. #11
    I like traffic lights
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    Easier fix: Stop using MS IE.

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