Gator came into the spotlight mid-2001 for its practice of selling pop-up ads that are delivered to customers visiting rival Web sites, what was then known as getting "Gatored". The company also sold banner ads that obscured those sold by online publishers. While such tactics grew popular with many Fortune 100 advertisers, some Web sites moved quickly to restrict the practice. The Interactive Advertising Bureau, for one, criticised the company for selling banner ads that obscure those sold by online publishers, saying they were destructive to the ailing market. Gator quickly sued the IAB, alleging "malicious disparagement", but the two parties eventually found common ground when Gator agreed to stop selling banner overlays. In June 2002, a group of publishers including The New York Times and Dow Jones sued Gator, alleging that its ads violate their copyrights and steal revenue. A month later, a federal judge in Virginia ordered Gator to temporarily stop displaying pop-up advertising on Web publishers' pages without their permission. Nevertheless, the company has said it has reached profitability through its ad network. Gator said in November that revenue grew 32 percent from the second to third quarter of 2002. Advertising industry experts say that Gator's tactics, along with those of other ad-supported software companies such as WhenU.com, can be taboo because they raise several unresolved legal issues that could tarnish an advertiser's image. Layers of software that direct consumers to new applications and Web pages raise questions about who owns the desktop -- the customer or the publisher. Backlash from either side could land an advertiser into a public-relations nightmare, ad executives fear, at least until the issues are ironed out. On the one side, sites like Washingtonpost.com say that Gator and others are trading on their publishing backs, taking revenue away from a site they've built. On the other side, software providers and even civil libertarians say that people have the right to run any application they choose on the desktop and if that means that they see targeted ads atop a requested Web page, then so be it. Other ad executives say that Gator's new service plays into the explosion of paid search. "Search is a highly efficient targeting vehicle -- it works for advertisers, especially those who are trying to sell products online," said Adam Gerber, media director for ad agency the DigitalEdge. "So it doesn't surprise me that people are trying to develop it more than it already exists."
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