Claria Sheds Adware as Industry Seeks Transparency

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Once the poster child for adware, Claria snapped its ties with the space July 1 after seven years of providing applications like Gator eWallet, SearchScout Toolbar and DateManager.

With this move, Claria walks away from revenue reported at $100 million in 2004 -- nearly one-fourth of the entire adware market's total, according to industry estimates. It is shifting focus to a new offering in behavioral targeting via an automated, customized Web page called PersonalWeb.

"Our plan was never to be the king of the adware space," said Scott Eagle, Claria's executive vice president in Redwood City, CA. "It was to be the leader in the behavioral space."

The behavioral algorithms used to target asynchronous pop-up ads on consumers' computers now are used to select and maintain relevant content for each user's version of PersonalWeb.

PersonalWeb partners with content providers to create "gizmos," or segments of content that can be featured on a Web site based on a user's online behavior. Each gizmo lists recommended sites and RSS feeds or premium content from publishers. It also may include a banner ad, if appropriate.

"The vast majority of the [PersonalWeb] space is devoted to content," Mr. Eagle said. "A few well-targeted ads create more value to advertisers, to consumers and to monetization for us."

The beta version of PersonalWeb can be downloaded free at www.personalweb.com. The service automatically provides content or can be edited manually.

Adware firms often have faced criticism, accused of breaching privacy and consent regulations and infringing on consumers. Not surprisingly, adware providers are adapting to new market conditions. For example, WhenU and Zango -- a merger of 180 Solutions and Hot Bar -- continue to provide adware but have shifted their focus based on the controversy in the industry.

"Our company has totally re-engineered itself over the last 18 months," said Mark Ippolito, vice president of ad sales for Zango, Seattle. "Our No. 1 goal is to provide our customers with a safe and secure, trusted environment."

Mr. Ippolito said that the company has 200,000 users downloading Zango to their desktop daily. Zango estimates overall users at 20 million. He claimed that the company's Hot Bar acquisition made it "the undisputed lead desktop advertising company in the industry."

Zango now promotes standards of privacy, transparency and accountability. The company recently underwent a third-party investigation, which determined it met the Interactive Travel Services Association's "Best Practices for Adware" criteria.

Meanwhile, WhenU  also aims to be a transparent ad provider through co-bundling its technology with other software providers.

"It's totally upfront," said Billy Day, CEO of WhenU, New York. "[Users] can choose to pay [for software] or choose to see WhenU ads."

Mr. Day said WhenU is seeing growth in the adware industry due to players in the space pursuing best practices and improving behavioral targeting while consumers are opting for downloadable software rather than prepackaged.

"The controversy of the space will turn into the strength of the model," he said. "Downloadable software is going to become a bigger and bigger thing. Anybody who charges for a service or software can offer a user the option to pay or see our ad."

Claria's exit from the adware industry puts an end to Feedback Research, the company's marketing research unit. It provided analytics of consumer Web usage patterns based on the vast network of users with Claria software.

Mr. Eagle said Claria will research activities further when the number of PersonalWeb users increases.

"We're at a momentum rate that is positioned to reach 100,000 installs [by last month]," he said.
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