Adware Pioneer Moving On

A pioneer of software that delivers pop-up ads based on Web sites that Internet users browse said Tuesday it will exit that business by June following persistent criticism from online publishers, consumer groups and privacy advocates.

Claria Corp. had said last summer it was phasing out its adware business in favor of new personalization services, but it did not commit to a timeline or promise to drop such ads entirely. Tuesday's announcement is the first such commitment.

The Redwood City company said it has hired Deutsche Bank Securities Inc. to help sell its adware assets.

Critics say adware has emerged as one of the top scourges of Internet use because it often degrades computer performance, tracks a user's browsing habits and is installed without permission.

Despite the pledge to stop adware, critics remained wary of Claria, which generated more than $149 million from 1999 to 2003.

"If they really wanted to demonstrate a commitment to being anti-adware then the right thing to do is shut down the operation, not sell it to somebody else so they can continue what Claria started," said Dave Kramer, an attorney at Wilson Sonsini Goodrich & Rosati, who has represented clients in adware lawsuits.

Claria, which previously went by the name Gator Corp., was among the first companies to offer advertisements that were tailored to the Web sites a user visited.

In a statement, Claria said it will require any buyer of its adware assets to agree to abide by a set of standards outlined by Truste and other privacy watchdog groups.

Claria executives declined to give further details or discuss their reasons for existing the business.

Claria's software typically came bundled with free products such as its own eWallet password-storage program and file-sharing software like Kazaa.

Though licensing agreements disclose the ad components, many computer users don't bother reading them, prompting complaints from privacy advocates and consumer groups that Claria wasn't doing enough to obtain consent.

Claria has said it will focus on a new service called PersonalWeb, which generates "personalized Web portals" on the fly so that a user who just checked baseball scores and movie show times might get a page pulling top items from ESPN and Moviefone.

On the page would be targeted ads from BehaviorLink, the company's new ad network aimed at serving banner ads targeted to a user's interests. Unlike the old pop-up ads, which sometimes covered up someone else's Web site, BehaviorLink ads come with the site's permission.

The company was a defendant in numerous lawsuits filed by The New York Times Co., Wells Fargo & Co., and other businesses, which complained that pop-up ads served obscured other advertising on their Web sites.


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