Saturday, April 30, 2005

Spyware: Lawsuits, Falling Stock Prices, and a Taxonomy of Spyware Installation Methods

I've been asked by a lot of people to help them fix their computers.

The things just don't run like they used to when they were new. Popup advertisements just appear out of nowhere. Sometimes so many popups that people can't even use their computers. The hours that I've wasted clearing away some of this garbage I'll never see a dollar for. I don't mind helping friend's who can't get rid of this stuff themselves. They didn't ask for this stuff to appear on their computers, and were tricked into installing it in most cases.

But there are other people who did know that my friends wouldn't want those advertisements, and that software. And when it comes to those CEOs and Presidents and Vice Presidents of companies, and marketing directors and other decision makers, I'm not upset about the potential hit that their companies might take on their stock prices if there is successful lawsuit against them for the placement of unwanted software on people's computers in less than transparent ways.

Searchviews has an article on the State of New York suit against Intermix Media, SearchViews: The Ripple Effect of the Eliot Spitzer Suit, and some of the potential collaterial impact upon a successful legal action. In addition to their thoughtful post, they point out a post on The Internet Stock Blog which considers how that case may impact other internet stocks - The Internet Danger List: stocks at risk from Spitzer's attack on Adware.

The attack on the illegal disemination of spyware and adware may not end with Eliot Spitzer's suit against Intermix Media (ticker: MIX). This report outlines why and provides a tentative list of other Internet stocks at risk.

According to that report, companies that could be impacted include Ask Jeeves, Findwhat, Yahoo!, Valueclick, Expedia, Netflix, Travelocity, and more.

Though I do want to clarify something. The risk isn't from Eliot Spitzer's lawsuit. The risk is from engaging in a means of advertising that is questionable to begin with, is unwanted by most of its recipients, and is potentially the target of litigation from anyone. When the business decision was made to manufacture or distribute software that people probably wouldn't install on their computers if they knew what it did, that's where the risk attached. A company that uses this type of advertising has to already know that they are also potentially a target.

Ben Edelman, who has been involved as an expert witness on the subject of spyware in a few legal cases, has started a series on his site about Spyware Installation Methods. Typical of his research on a number of other subjects, so far what he has produced is extremely thorough and thought provoking. His taxonomy of installation methods brings back some memories of the frustration I've faced at trying to clean up people's computers.

It's great to see someone with his knowledge and ability bringing some sunlight to the shady practices that these companies are employing.

Kudos to him, and to Eliot Spitzer.