April 29, 2005 in Business

Internet marketer sued over spyware

Associated Press
 

ALBANY, N.Y. — New York Attorney General Eliot Spitzer sued a major Internet marketer Thursday, blaming it for secretly installing software that delivers nuisance pop-up advertisements and can slow and crash personal computers.

Shares of the company, Intermix Media Inc. of Los Angeles, fell $1.01, or 21 percent, to $3.79 in midday trading on the American Stock Exchange.

Spitzer accuses Intermix of redirecting computer users to Web sites where ads get displayed, adding unnecessary toolbars to Web browsers and delivering unwanted ads that pop up on computer screens.

A six-month investigation found that the company installed a wide range of advertising software on countless personal computers nationwide, with more than 3.7 million downloads directed at New Yorkers alone, Spitzer said.

“Spyware and adware are more than an annoyance,” Spitzer said. “These fraudulent programs foul machines, undermine productivity and in many cases frustrate consumers’ efforts to remove them from their computers. These issues can serve to be a hindrance to the growth of e-commerce.”

Christopher Lipp, senior vice president and general counsel for Intermix, denied promoting or condoning spyware, saying its toolbars and redirect applications do not collect personal information on computer users.

According to Spitzer, Intermix owns and operates such Web sites as mycoolscreen.com, cursorzone.com and flowgo.com, which advertised screensavers, games and other software available for download. Though those programs are free, they often carry other software for delivering ads and can interfere with normal computer use, he said.

One of the company’s ad-delivery programs, “KeenValue,” delivered pop-up ads while another program, “IncrediFind,” redirected Web addresses to Intermix’s own search engine, Spitzer said.

The ad software sometimes comes without notice, or if a user was asked permission, it was often through a vague reference in a lengthy licensing agreement that could be misleading or inaccurate, investigators said.

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