Claria Abandons Adware

As recently as last spring, Claria was pulling in almost $100 million annually from its Gator/GAIN line, and drawing the ire of anti-spyware advocates, who said Claria's bottom line "makes spammers look like two-bit back alley operations."

Last summer, however, after media reports revealed that acquisition talks with Microsoft had fallen apart, Claria said it would move out of adware. However, it neither dropped the business nor offered up a timeline.

Now it has.

"Claria will exit out of the adware business by the end of the second quarter of 2006," the company said in a statement issued Tuesday.

Company officials did not respond to repeated calls for additional comment.

"They've been hinting for a long time that they were leaving adware," said Richard Stiennon, chief research analyst at Michigan-based IT-Harvest and formerly of anti-spyware vendor Webroot. "They've been trying to be pre-emptive about being in compliance with all the adware and spyware laws, and I think they were becoming a good adware citizen.

"But when they did that, it cut into their profitability," Stiennon said. "Doing that broke their business model, so I think this is just a last-gasp effort to put a viable face on a business that's going nowhere."

Noted spyware researcher Ben Edelman agreed. "Claria is realizing the jig is up. To get users to run its software, it has had to trick users [into installing them] and by bundling them with programs users actually want," Edelman said in an e-mail interview. "But these strategies don't work forever.

"Even Claria can't trick all of the people all of the time."

However, it's uncertain if Claria's adware business will disappear or simply change owners. For its part, the Redwood City, Calif. company has retained Deutsche Bank Securities Inc. to handle the sale of its adware assets.

"We are in active discussions with a number of interested buyers," Claria said. "A condition of any sale of Claria's consumer software applications, however, will be the requirement that any purchaser agrees to adhere to emerging industry standards outlined by TRUSTe and other industry coalitions."

Page 1 of 2 Next

Email This Story Print This Story Reprint This Story Tag in Del.icio.us Digg This Security Technology News More TechWeb News Bookmark this site!    Try TechWeb's RSS Feed! (Note: The feed delivers stories from TechWeb.com only, not the entire TechWeb Network.)