It hasn't been a particularly good year for Phorm, the snoopvertising (adversnooping?) agency that began life as a spyware company dedicated to rootkits. UK ISPs British Telecom and Carphone Warehouse recently confirmed they wouldn't be proceeding with Phorm's Webwise platform, and now both Phorm's Chief Technical Officer and Director of Corporate Communications have left the company. Phorm has also shut down a website they were using to smear critics. Phorm, who hopes to partner with ISPs to sniff your time spent on various sites to send you more "tailored" adverts, has global expansion ambitions that may not succeed if they can't find a source of actual revenue.

We've spent many years following the exploits of spyware outfit 180Solutions, from their breakup of anti-spyware coalitions to their endless production of malicious adware. If you recall, they changed their name to Zango, and enjoyed bullying any website or spyware vendor that dared call their products spyware.

This week we noted that as part of New York Attorney General Andrew Cuomo's rather dubious "crackdown," on ISPs and child porn, he advised ISPs to begin using a deep packet inspection solution from a company named Brilliant Digital. The technology would analyze user packets, comparing transmitted user data to a master database of illegal content. Techdirt has an interesting follow up post on Brilliant Digital, and their history in the spyware business (you may recall them as the company that installed a stealth P2P network inside Kazaa). The company also has an aggressive history on the patent front.Just another ordinary day on the Internets.

For many years we've covered the shady exploits of a company named Gator, who published infectious crapware -- then tried to sue anyone who criticized their product. Gator eventually changed their name to Claria -- a superficial attempt at rebranding.

Spyware researchers are insisting that marketing software being used by Sears invades user privacy, and the company does little to educate the width and breadth of the tracking behavior of the software. An e-mail from Sears urges users to join the "dynamic and highly interactive" My SHC Community, promising a sweepstakes entry and $10.

For many years, we've written some highly critical reports about Spyware vendors, some of whom would then e-mail us asking us to stop referring to their product as Spyware. Claria Corporation was perhaps the worst offender in this regard, threatening to sue anyone (AV Vendors or the press) who called their Gator spyware what it actually was.

It has all been part of a massive attempt by the spyware industry to hoist some kind of pseudo-legitimacy on a sector that spent almost a decade trampling user rights and privacy. As part of this push, Zango (formerly 180Solutions) recently sued Kaspersky over using the Spyware tag, but a court has dismissed the lawsuit:Specifically, the court ruled that AV companies are protected under statute 47 USC 230(c)(2), which defines the AV vendor as an interactive computer service provider and immune to such semantic lawsuits by the spy-infectious-disease-spew-ware industry.

Federal Trade Commissioner William Kovacic said this week that most wrongdoers in the spyware arena "can only be described as vicious organized criminals." "Many of [the] most serious wrongdoers we observed in this area, I believe, are only going to be deterred if their freedom is withdrawn." That should have been obvious by the continued success of spyware and spamlord Sanford Wallace.

Users in our security forum alert us to the fact that one of their favorite anti-malware outfits, Privacy Software Corporation (PSA), has been acquired by security software vendor Comodo. PSA was the maker of a very popular anti-malware tool known as BOClean. For those worried about the impact on quality sometimes seen after these kinds of deals, there's good news: "We will now make BOClean a free product and continue to deliver top notch support," promises the company.

Users in our Security forum point to a story over at the Sunbelt blog that claims a teacher could face up to forty years in prison after students were exposed to porn via the spyware-infected PC in the classroom. Or at least that's the substitute teacher's legal defense, after police found the teacher accessed a number of pornographic websites while the children were in the room. "Computer expert W. Herbert Horner, testifying in Amero's defense, said he found spyware on the computer and an innocent hair styling Web site 'that led to this pornographic loop that was out of control,'" claims the original story, available here.

Users in our Microsoft forum are a little annoyed that Windows Defender anti-spyware software no longer supports Windows 2000 after beta expiration, but they've found a workaround to thwart Microsoft's crippling of the software on the OS. "This clearly demonstrates it's not a limitation of the Win2k operating system, but rather a pressure tactic by MS to force users to upgrade," complains one user.

McAfee has made predictions about the top ten security threats it will face in 2007. Some of these threats include continued increase in spam volume (including bandwidth-consuming image spam), widespread use of bots (and botnets) by hackers, and a comeback in parasitic malware. Read the complete list of threats as published by IT News Online.

"The Federal Trade Commission is cracking down on companies that deceptively install software onto millions of consumers' computers," says Business Week, fueled by this FTC Press release. In addition to last month's $3 million settlement with Zango (aka 180Solutions), the FTC has announced a settlement with Odysseus Marketing, which prohibits them from using security exploits to install software. The company must also avoid "misrepresentation" of their product and needs to pay out $1.75 million. Are these penalties severe enough?

Last week we mentioned that the FTC has decided to fine adware vendor Zango (180Solutions) $3 million for installing adware without user consent. Techdirt points out how, despite the fine, the company is not changing its ways, and new dubious install methods are popping up all the time. Vital Security has more detail.

Spyware guru and forum regular Ben Edelman offers up this analysis of how Vonage has been funding some of the sleazier spyware operations. Vonage spends more than $20 million per month on advertising, and much of that money is finding its way to outfits such as Direct Revenue, Vendare Group, and others - albeit indirectly. Vonage CEO Jeffrey Citron last year told the Associated Press "We do everything we can to make sure our partners adhere to our standards." Edelman disagrees, stating Vonage could do so much more, including avoiding business partners with clear ties to sleazy outfits.

As we've tracked through the years, Spyware firm Direct Revenue has been one of the least ethical operations in the business, unleashing the hated "Aurora" spyware on computer users. Business Week is running an interesting expose on the company, that takes an inside glimpse at the operation based on thousands of now public documents made available after the lawsuit by New York AG Eliot Spitzer.

"Sifting through a stack of customer complaints in June, 2005, a Direct Revenue employee decided to tally the most frequently used words of aggression: "die" (103 times), "f------" (44), and "kill" (15). Douglas Kee, then Direct Revenue's chief of quality assurance (QA), ribbed colleagues in an e-mail that with all the death threats, it was a "good thing QA sits farthest away from the entrance."

Resident security forum participant and spyware researcher Ben Edelmen recently posted a chunk of these internal documents over at his website.

Anti-Spyware researcher and forum regular Ben Edelman has filed a class-action lawsuit against Yahoo for "partnering with spyware purveyors to perpetrate syndication fraud against advertisers," reports Eweek. Among other claims, the lawsuit alleges Yahoo uses its Overture network to make money off of typo-domain squatting. "[Instead] of safeguarding against such abuse, finding such practices and diligently putting a stop to them, [the] defendants have actually engaged in such abuses," the complaint states.

For years we have discussed the spyware outfit Direct Revenue, particularly hated of late because of their "Aurora" evilware. Now with the new lawsuit by New York AG Eliot Spitzer, court documents are making it apparent just how shady the operation actually is. Forum regular and spyware researcher Ben Edelman is offering up some of these documents over at his website, and many of them are quite damning. Constant name changes, attempts to intimidate critics, and endless efforts to dodge detection by spyware vendors. Fascinating reading if you've followed this outfit closely.

The site Firewallleaktester.com has a number of windows test programs that when run, attempt to get OUT of your PC. The list of tests encompasses a number of advanced techniques, including several that are probably as yet un-exploited by malware in the wild.

Despite endless claims of reform, ad/spyware outfit 180Solutions still has affiliates using security exploits to install their software, notes spyware researcher Ben Edelman. In January, 180Solutions had all affiliates switch to their "S3" installer, and stated that "180solutions will own the entire experience from beginning to end on all installations of its products." Apparently not.

Users in our Security Forum discuss gold medal winning Australian skier Dale Begg-Smith, who apparently made an Internet fortune by developing malware. His companies, CPM Media and AdsCPM often use security exploits to install spyware on user PCs. He's being dubbed the "spam man" by Australian journalists, and an "Internet innovator" by outfits like Bloomberg. He apparently helped start the businesses when he was 13 with his brother, but didn't much feel like talking about them this week with reporters.