Screensavers, games and other forms of so-called "freeware" have served as hosts for associated software since at least the mid-90s. At the height of the Web wars, Microsoft and Netscape alone were engaged in a constant battle of plug-in escalation, loading their Web browsers with a profusion of add-ons. But the recent prominence of plug-in parasites is especially impressive because the practice of bundling has been in the midst of a severe public backlash -- the anti-spyware scare -- for at least a year or two.
The problems started when Steve Gibson, a security expert, discovered a strange piece of software on his computer in January 2000.
"I was running an early version of ZoneAlarm [a firewall application that alerts users to breaches of security] and it told me that a program called TSADBOT.EXE was trying to use my Internet connection," Gibson says. "It was made by Conducent, a company that is pretty much gone now, but that's when I realized that I had something in my system that I hadn't deliberately installed."
Gibson never did find out which piece of software brought him the program, but about a month later, another security expert named Dale Haag discovered a similar piece of software on his computer. The program had been attached to CuteFTP, a free file-transfer application. Haag's initial analysis found that the software -- as he wrote in an e-mail to a mailing list devoted to Internet legal issues -- "use[d] a hidden scheme to send information from your computer to a company called Aureate."
The e-mail soon spread across the Net. Gibson then publicized his own experience. The derisive term "spyware" was born to describe software that supposedly surreptitiously installs itself on your drive, collects information, and then sends that information back home. Media outlets jumped all over the story. Users all over the world started setting up Web pages and deluging CuteFTP and other suspicious parties with complaints. Some even sued. Netscape and RealNetworks became targets of class-action lawsuits aimed at stopping the alleged monitoring and collecting damages.
Many of the concerns turned out to be unprovable. There is no hard evidence that either Aureate (now called Radiate) or Conducent, for example, actually sold personal information or indexed hard drives. The main responsibility for the bad press appeared to lie not with the parasites, but with the hosts, some of who failed to let users know what they were downloading.
Still, the potential privacy issues remained problematic, so Gibson came up with his own solution. He wrote "opt-out," a program that uninstalled TSDADBOT. Then, a company called Lavasoft started distributing Ad-Aware, which traces what "spyware" programs are on a given hard drive, then removes them. It's the law of Internet software -- for every parasite, there's a cure. And then the parasites mutate, and so on.
"They [Ad-Aware] promised that it would stay free, so I pretty much gave up," Gibson says.
Aureate also retreated, rewriting its privacy policy during the spring of 2000, and auditing third-party software companies "to verify that they had appropriate disclosures in their own license agreements," says Jeff Ready, Radiate's vice president of marketing.
With the industry apparently cleaning itself up, many of the loudest critics moved on and the press lost interest. But the parasites propagated as never before, boosted by both the economic downturn and Napster's travails. Software companies hungry for revenue looked to parasites as a desperately needed financial lifeline. Meanwhile, Napster's troubles created an explosion of file trading software alternatives -- which themselves constituted a fertile environment for bundling.
Innovative ad-related companies started to sprout and expand particularly quickly. With interest in banner ads declining, the old and new entrants became vessels of hope -- fresh revenue streams that could attract both advertisers and users who tended to ignore banners.
WhenU.com is one company that has benefited from such downturn bundling. The New York company had been offering contextual ads -- mostly coupons that appear as pop-ups on e-commerce sites -- since 1999. But the idea didn't take off until January, when executives decided to start bundling the ad-serving software with BearShare, a popular Gnutella client, and other free downloads. These hosts carried WhenU.com to critical mass. "We couldn't have generated the numbers we're generating now without co-bundled deals," says CEO Avi Naider. With download partners inducing installs, and because of the demand for new, more aggressive forms of advertising, "we've been able to multiply our user base and revenue by tenfold," he says. More than 3 million people now have the company's SaveNow software on their computer, says Naider.
"Compared to the rest of the market, we're the only company we know of that, in a dying ad market, is showing considerable growth," he says.
Actually, WhenU.com is far from alone.
Next page: "Enough volume to become interesting" -- to the parasites