And it’s only Wednesday. In the first, DirectRevenue (spyware distributor extraordinaire) settled with the State of Illinois. No cash - just a little “changing of business practices.” Right..we’ve seen that work before.

In the second, our good man Elliot Spitzer took a chunk of flesh out of an email marketing firm (as well as $1.1 million dollars), for using collected email addresses without the addressees’ consent. Now we’re talking.

***UPDATE***

Make that three, if you call going to jail for distributing trojan horses a settlement (you could actually say “four,” if you take into account that this one was a husband and wife team).

And the FTC should get their lawyers ready as well.

Hot on the heals of academics and big internet companies banding together to out spyware makers, the FTC is proposing a little outing of their own. They want to publish the names of advertisers who covort with the former.

My take? I suspect it won’t be long before adware distributors are putting up deceptive product from non-existent big name clients just to steer the FTC into a bunch of lawsuits. The government thinks it is all goody two shoes, fun and games. Unfortunately, the space is still the wild, wild, west, and the bad guys are not going to fight fair. They have “affiliates” to hide behind and blame for any mishaps, and that is exactly what they will to do by pushing the FTC, and some big name litigants (and their attorneys), into each other’s crossfire.

Stay tuned.

Adware companies suck to begin with. They know it, so when they get attacked themselves, they always have someone to fall back on, their affiliates.

The question is, how can they control their affiliates in the first place?

Its ludicrous to think they could and they know it too. But now that a big spyware affiliate has been stone cold busted for using a botnet to distribute adware, maybe the Feds will wake up and start pummeling the problem at the source.

Unfortunately, that’s wishful thinking. Its like asking the government to go after the illicit drug manufacturers instead of busting street dealers. It isn’t going to happen because they don’t have the brains (or the balls).

McWilliams has a blow by blow on the beastmaster botmaster and the bust.

Its either development of conscience or the first step in avoiding a lawsuit. Either way, adware firm 180solutions is now notifying unsuspecting “customers” on how to remove its software from their systems.

The company is pointing the finger at “rogue distributors” (meaning their affiliates) which get the software installed via whatever sneaky means possible. They are “hoping” to stop those effort, although I am not sure what means an adware company could have to get folks to willingly submit to an install.

Good for 180solutions, if in fact it is a genuine effort. Now lets see how fast they die.

BusinessWeek just this article about some of the big name companies that have promotion being distributed via adware.

While this is nothing really new, it does show you that adware is now a mainstream problem, for both consumers and companies. Consumers can’t stand the stuff, and companies, due to the byzantine affiliate network behind adware promotors, can’t control it.

Read up. Meanwhile, here is a list of the companies targeted by BusinessWeek…

- J.C. Penney Co.
- Capital One Financial Corp
- Vonage Holdings Corp.
- Monster Worldwide Inc.
- Expedia Inc.
- Priceline.com Inc.
- Orbitz LLC
- Sprint PCS
- Sony Corp.
- Circuit City Stores Inc.
- Mercedes-Benz USA
- Dell USA
- Yahoo Inc.
- AskJeeves
- Netflix Inc.*
- Verizon Communications Inc.*

*supposedly discontinued adware programs

According to a recent report out of McAfee, the average web user has 3 adware applications on their machine. The data was gleaned from McAfee’s VirusScan Online user statistics, and since the service is for Windows machines, “average web user” of course excludes everyone running OS X and Linux.

According to a recent survey, email marketing in the UK is poised for excellent growth this year.

What’s the number one reason for the enthusiasm? Demand.

With so many big companies in eccommerce, media and publishing, financial services, technology, and travel and leisure vying for eyeballs, it is no wonder that email (and adware ) targeting internet users is still such a booming marketplace.

Unfortunately, along with the legitimate marketers come those who are less so, and as they say, “A rising tide lifts all boats!”

While you have to take some of what was said in this article with a grain of salt (considering the source is an anti-spyware company executive), it does bring up an interesting point.

Adware would not be floating around the net, and penetrating unsuspecting users’ machines (Windows, that is), unless there was money to be made.

How much money is actually been made could be subject to enormous debate, but I am not going to get into it with Richard Stiennon of Webroot. But like spam next to it, there is no argument here - there is money someplace. The article above notes that the figures could be akin to estimating porn revenue - you know it is big, but who is actually getting what, and how much, is nearly impossible to estimate. And lets not forget, hackers have made the transition from working for pride to working for dough, and many are playing the spy/ad/malware game.

With the problem growing (some consider it still nascent), the economics of spyware, meaning both sides of the coin (the implementation of bugs, as well as their removal), is going to keep players in the space for some time to come.

Anti-spyware software vendors are generally out for your best interests. Its when they decide what is and isn’t spyware is when your fate is sealed. Luckily, Computer Associates PestPatrol decided in favor of the customer, and
*****WARNING - THIS IS A PRODUCT PLUG (BUT IT ISN’T BULLSHIT)*****