LookSmart's temporary link to this distribution partner highlights the reach of spyware across the Internet industry. Untangling from spyware is becoming as hard for Internet businesses as it is for unsuspecting Web surfers.
The ranks of spyware and adware makers are on the rise, because the technology makes it relatively easy for someone to make money. Google, Yahoo and others collect fees from marketers each time people click on sponsored text ads. Marketers buy into the programs and bid for keywords in hope of reaching people who are searching for a particular product or service.
Major search engines and second-tier search providers distribute those text ads to third-party publishers and split the fees with them when people click. So if a spyware maker can arrange to place text ads over popular search engines, it is set to cash in.
"You would not believe the size and scope of the gray market in this arena," said Elliot Noss, president of Tucows, a downloads site. "It runs the gamut from light gray to dark gray."
The complexity of the ad distribution partnerships is illustrated in Yahoo's recent move to provide Web surfers with a tool to block spyware and viruses on the browser.
Yet the toolbar application does not block advertising software like that from controversial company Claria, formerly known as Gator and one of the largest providers of adware. Through its own tool called Search Scout, Claria delivers text ads from Yahoo's Overture Services in a pop-up window when people search on Google. As much as 30 percent of Claria's revenue is derived from Overture.
In another example of the cottage industry, Internet service provider 550Access.com introduced a toolbar in March that blocks certain ads from search results and replaces them with others.
Google's role
Google also distributes its text ads to questionable areas of the Web through Applied Semantics, a company it bought last year. When Web site visitors type in a misspelled domain name, they might find a page of related sponsored ads from Google.
Google limited its comments for this story, citing its upcoming $2.7bn (£1.5bn) initial public offering. But the company pointed to recent guidelines it published on its Web site regarding downloadable PC software and best practices for the industry to notify consumers of their tactics and give them a way to opt out.
