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Advertising - Friday, April 29, 2005

Spitzer Chasing Down Spyware

A number of a:c readers have commented that there is a disconnect between our post that VCs investments in spyware/adware companies are under duress and a few days later we learned that ABS Capital had invested $20M in adware firm WhenU. We rarely second guess VCs, but believe that ABS blew it.

To all the woes that bedevil adware/spyware, add Eliot Spitzer. The New York Attorney General announced that he is suing the adware distribution practices of Intermix Media. As a result, the stock price of Intermix has halved in a few days. We wondered why Spitzer chose to go after Intermix among all possible companies. It is after all a distributor of adware, rather than a maker/operator, and it has a reputation for scaling down its adware distribution. We suspect that Spitzer thought it would be effective to go after a publicly-traded company where the repercussions would be obvious. And by going after the distributors, he is hoping to make a dent in the sector by eliminating major sources of access to adware installations.

Read - New York Sues a Marketer on Use of Internet Spyware (NY Times)
Read - No Exit - Malware Is A Bad VC Investment (The a:c)