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Wednesday, June 23, 2004
Recent legal decisions seem to favor invasive spyware and adware technologies from WhenU and Claria (formerly Gator). Business Week's Ben Elgin explores recent developments.
The article pulls no punches on Yahoo's role in propping up the purveyors of unsightly-boil-ware:
Few companies have done more to prop up the adware industry than Yahoo. A deal with Claria enables Yahoo to push its search-related ads to millions of users -- even when they're typing key words into a rival's search engine.
Why is Yahoo willing to risk bad press? Perhaps profits. SEC documents indicate that Yahoo's Overture division claimed 36% of revenue from such ventures at the time of the Claria deal early last year. That would bring in $24 million in revenue if the partnership matches last year's performance. At the 90% margins analysts estimate, this would yield profits of $22 million, representing 5% of Yahoo's projected $446 million in 2004 earnings. A Yahoo spokesperson has no comment on the numbers, but defends the partnership with Claria, saying the company takes the necessary steps to inform users of what they're getting.
Promoters of intrusive ad technologies (seen your inbox lately?) don't care what might happen to the medium itself, as long as they can say they're playing just barely to the legal side of the divide that separates advertiser from otherworldly, misanthropic alien. But companies who eagerly rush in to adopt the most interruptive of interruption marketing methods make it hard on anyone else trying to reach targeted customers. So, the clutter grows, and the latecomers won't find many crumbs left on the ground if they try to dine at this dubious banquet.
Posted by
Andrew Goodman
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D'oh!
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