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Computerworld - Zango, the adware distributor fined US$3 million by the U.S. Federal Trade Commission (FTC) in 2006 for sneaking software
onto people's PCs, has closed its doors after being acquired by video search engine blinx.
Zango's former chief technology officer blamed the company's demise on several factors, but put at the top of the list the
very practices that got it in hot water with the FTC, as well as with security analysts who had labeled the company's software
"So why did Zango ultimately fail? [Number] 1: Zango screwed up its distribution," Ken Smith, a co-founder who stepped down
from his CTO spot last summer, said in a long entry on his personal blog Sunday.
"Back in 2003-2005, we partnered with some people that we should never have partnered with," Smith admitted. "During that
time period, my best estimate is that something like 4% of our installs during that time period were completely silent ...
the result of affiliates using browser security holes to install Zango's software with no knowledge or consent by the user."
In 2006, Zango settled FTC charges that it used unfair and deceptive practices to download software to users' PCs, and agreed
to pay a $3 million fine. As late as May 2008, however, noted antispyware researcher Ben Edelman blasted Zango for providing sexually explicit material without labeling the content as such.
In August 2008, security researcher Chris Boyd, the director of malware research for FaceTime Communications, claimed Zango profited from pirated movies, including that year's blockbuster The Dark Knight.
Zango's Smith saw it differently. The bigger problem was that the vast majority of our installs received inadequate consent:
the user technically had an opportunity to decline the install, but wasn't presented with enough information to make an informed
choice," he said.
He also claimed that Zango had cleaned up its act long ago. "Well before the FTC ever came knocking on our door, we were working
our asses off to fix it," he argued. "It's been years since the last inappropriate Zango install, and Zango's notification
and consent is by any reasonable standard better than Yahoo's, better than Microsoft's, and better than Google's.
"But it was too late: the damage had been done."
Today, Edelman agreed that Zango's practices led to its doom. "Zango could never get over its history of non-consensual and
deceptive installations," he said in an e-mail. "Pay partners to install software without user consent or through all manner
of deception, and it will be hard to later convince users to offer their trust or praise."
He questioned whether Smith had his timeline right. "I'm not sure it's actually true that all the deceptive installations
stopped so long ago," Edelman said.
"Having a bad reputation as an Internet company is somewhat worse than having a bad reputation in high school," Smith said.
"Instead of not getting invited to the cool parties, you find yourself unable to close deals with strategic partners, which
is a lot worse."