Friday, May 13, 2005

Spyware and Adware a $2Bn business

Some experts say that spyware and adware programs generate between $500 million and $2 billion per year in revenue for advertising middlemen. That’s not surprising if one considers than some of the largest companies are, perhaps unwittingly, paying for ads served through spyware. A story by the Los Angeles Times dives in detail into the spyware game. In short, a large company hands over money to an ad agency to develop its online ad strategy. The ad agency then turns to advertising networks and their affiliates to serve the ads to Web surfers. Along the way, the ad networks and the affiliates get a cut of the ad spending based on user behavior (rates are based on whether or not the user views the ad, clicks on it or makes a purchase through the ad). As the Times points out, the more clicks, the more money to the ad networks and their affiliates. In order to take advantage of this model, some companies use holes in browser security to install programs that will continuously serve ads to users. Big-name companies get caught up in this when their ads are the ones popping up, thus supporting the practice. The Times singles out companies such as FindWhat, Claria (and Yahoo by association), Intermix Media, 180Solutions, and DirectRevenue as companies whose practices have been called into question. Said Joe Stewart, a security researcher for Lurhq Corp., "Before long, [users] will start to think the Internet is supposed to have pop-up ads on every page."
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