[quote name='http://www.wired.com/wired/archive/13.12/spyware.html']
Don't Call It Spyware
Three years ago the company was considered a parasite and a scourge. Today it's a rising star - selling virtually the same product. How a pop-up pariah won the adware wars.
By Annalee NewitzPage 1 of 3 next »
Back in 2002, Gator was one of the most reviled companies on the Net. Maker of a free app called eWallet, the firm was under fire for distributing what critics called spyware, code that covertly monitors a user's Web-surfing habits and uploads the data to a remote server. People who downloaded Gator eWallet soon found their screens inundated with pop-up ads ostensibly of interest to them because of Web sites they had visited. Removing eWallet didn't stop the torrent of pop-ups. Mounting complaints attracted the attention of the Federal Trade Commission. Online publishers sued the company for obscuring their Web sites with pop-ups. In a June 2002 legal brief filed with the lawsuit, attorneys for The Washington Post referred to Gator as a "parasite." ZDNet called it a "scourge."
Today Gator, now called Claria, is a rising star. The lawsuits have been settled - with negligible impact on the company's business - and Claria serves ads for names like JPMorgan Chase, Sony, and Yahoo! The Wall Street Journal praises the company for "making strides in revamping itself." Earlier this year, The New York Times reported that Microsoft came close to acquiring Claria. Google acknowledges Claria's technology in recent patent applications. Best of all, government agencies and watchdog groups have given their blessing to the company's latest product: software that watches everything users do online and transmits their surfing histories to Claria, which uses the data to determine which ads to show them.
Apart from plush new offices at the northern edge of Silicon Valley, it's remarkable how little the latter-day Claria differs from the old Gator. It's true that the company has toned down its most aggressive tactics. Journalists, watchdogs, and regulators seem mollified. For the most part, though, the company is in the same business as before, courting the same customers and selling a product that does the same thing in the same ways. Claria wears in a sharp suit and has a scrubbed face and coiffed hair - but it still looks a lot like Gator.
CEO Scott VanDeVelde doesn't deny this. "I don't feel like there's a need to wipe the slate clean," he says. "Our technologies are dead center of where the market is going."
The spyware wars are over - and spyware has won.
Like many dotcoms born in the late 1990s, Gator began with an idea for a product - but no clear way to make money from it. "Our idea was a program that would store your passwords and automatically log you into password-protected sites," says Wally Buch. Buch brainstormed the software with a friend, Symantec founder Denis Coleman, who would remain involved in the company until early 2004. They called it eWallet.
Buch came up with the missing revenue model a few weeks later as he waited in the checkout line at a grocery store. The woman in front of him bought diapers, and he noticed that her receipt included coupons for baby products. Buch realized that the Web could do the same thing for advertising: If he kept track of sites people visited, he could deliver ads that reflected their interests and thus increase the chance of triggering a sale.
Along with then-CEO Jeff McFadden and VP of marketing Scott Eagle, Buch and Coleman decided to give away eWallet and use it as a sort of Trojan horse for pop-up ads. As users surfed the Web, ads would appear based on the site they were visiting.
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