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Clairia To End Pop-Up Network

Say goodbye soon to those pop-up ads from Claria Corp.'s oft-vilified ad-targeting technology. On July 1, Claria will stop running ads generated by its pioneering but highly criticized "adware" programs that monitor where people surf.

Instead, the company will launch PersonalWeb, which generates customized 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. Targeted banner ads or sponsored links, rather than pop-ups, would be shown.

"We've proven it (targeting) works for advertising, and we are highly confident it will work for content," said Scott Eagle, the company's executive vice president.

Claria is currently testing PersonalWeb with about 100,000 people, Eagle said, and is trying to persuade dozens of Web site operators to adopt the personalization technology. The service is expected to launch by early next year.

The decision to shut down the existing ad network comes despite Claria's failure to find a buyer for its adware assets, as the company had hoped. Eagle said several potential buyers also wanted the targeting technology that Claria is keeping for PersonalWeb.

Although those ads will stop July 1, the company said it will continue to collect data on Web usage until Sept. 30 for research and other purposes unless users remove its ad software, known as GAIN.

The company also warned that the free programs to which GAIN had hitched a ride -- among them, file-sharing software like Kazaa and Claria's own eWallet password-storage program -- could stop working as of Oct. 1. The company posted software removal instructions on its site.

One of Claria's persistent critics, Ben Edelman, praised the company for dropping pop-ups but warned it still faces challenges persuading people to install tracking software, this time to customize the home page.

He acknowledged much skepticism comes from knowledge of Claria's past.

"It's hard to say, `Well, now they have a new business, and we'll just forgive them,'" Edelman said.

Claria's ads to draw users to PersonalWeb say little about what users would be getting, though they lead to a site with more information. Privacy implications and other details are further explained during installation.

Ari Schwartz, deputy director of the Center for Democracy and Technology privacy-advocacy group, said questions remain about how Claria will use and market the technology, but the fact that a personal Web page engages users directly makes it an easier sell than ads that may pop up while visiting someone else's Web site.

Claria pioneered the adware business with its GAIN software. Critics say adware from Claria and others has become one of the top scourges of Internet use because it can degrade computer performance, track a user's browsing habits and mysteriously appear on computers without a user's full knowledge.

Adware is also lucrative, generating more than $149 million for Claria from 1999 to 2003.

Claria, formerly known as Gator Corp., began moving away from adware last year when it started developing PersonalWeb. It pledged in March to leave the business completely by the second quarter.

With PersonalWeb, users install software that, like GAIN, monitors Web visits.

The software can sense whether a user prefers e-mail through Yahoo Inc., Google Inc.'s Gmail or Microsoft Corp.'s Hotmail and automatically add a link to that service.

The personal page also can include links to frequently visited Web sites along with boxes containing headlines pulled from other Web sites. Those boxes change with a user's interests, be it sports or travel.

Ads do appear, but Eagle said they won't use any behavior data gathered from the old system. Nor does the company have any immediate plans, he said, for "aggressive or invasive ad units," such as pop-ups or rich-media ads that dance across Web pages.

Eagle said the company is working with several Web sites on developing exclusive feeds and possibly having those sites distribute a cobranded PersonalWeb allowing a site to personalize its home page.

So far, only one deal has been announced; PersonalWeb users could view video clips from the Web site EVTV1.com. Eagle said he expects to announce dozens more soon, but he acknowledged many Web sites are simply waiting to see how tests go.

Claria, whose investors include Canadian media company Rogers Communications Inc., also is in a joint venture with Softbank Corp. and its joint venture with Yahoo, Yahoo Japan Corp., to develop new personalized services for Japanese consumers.

Claria is hardly alone in pushing personalization technology.

Yahoo, Google and Microsoft's MSN all let users customize a home page, but unlike Claria's PersonalWeb, they require users to set it up by choosing what modules to include. Google also has an option for automatically personalizing search results, but that's based only on one's past usage of Google, not the entire Web.

Chris Sherman, executive editor of the online newsletter Search Engine Watch, said Claria and search companies alike will have to tread carefully, even if they get the technology working right to deliver what is considered a holy grail in search.

"Everybody's dabbling with it, but because the privacy issues are so big, companies don't want to risk losing trust," he said. "They are going about it cautiously."

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