Adware Firm Zango Shuts Doors

OPINION: The controversial firm spent 10 years abusing users, suing security companies, defending itself in the press and court, and breaking promises to everyone. Luckily, this chapter of the software industry is over.

Contrary to rumors that it had been sold, Zango is now out of business. Some assets have been purchased by video search engine firm Blinkx, but the company itself has closed its doors.

Formerly known as ePIPO, 180solutions and Hotbar, Zango pioneered many of the most intrusive advertising strategies on the Internet. Despite its insistence that they were legitimate advertisers and listened to their customers, the company never was able to escape its reputation for installing without permission, refusing to uninstall and never quite explaining what it was doing to the customer. It's not clear that, even in the end, it abandoned these abuses.

Ben Edelman, Harvard professor and spyware researcher, was one of those who brought Zango's practices to light: "Zango never offered anything sufficient to compensate users for Zango's substantial intrusion onto users' PCs." The price for such information should be high, but "the little trinkets and doodads Zango offered were not enough." Much of what the company offered in exchange was easily available elsewhere for free. It also had a habit of redistributing content to which it had no clear rights.

In other words, it was a shady company. Throughout its history it was caught at a variety of sleazy activities, from ripping off its affiliates to displaying pornographic ads with no warning. To protest its classification as malicious, it sued or sent threatening letters to several security companies, including Symantec, Kaspersky and Zone Labs.

In 2006, at the urging of the Center for Democracy and Technology, the Federal Trade Commission charged Zango with violations of the FTC act: Deceptive Failure Adequately to Disclose Adware, Unfair Installation of Adware, and Unfair Uninstall Practices. In November of that year Zango and the FTC reached a consent decree under which the company promised to reform its practices and pay back $3 million of ill-gotten gains.

But the following August Edelman spoke up with fresh charges of violations of the agreement:

  • Widespread Zango ActiveX Installations without Unavoidable, Prominent Disclosure of Material Terms (XP SP1 and Earlier)
  • Widespread Zango Banner-Based Installations without Unavoidable, Prominent Disclosure of Material Terms (XP SP2)
  • Ongoing Zango Installations with No Disclosure Whatsoever
  • Unlabeled Zango Ads - Toolbars, Desktop Icons and Pop-Ups
  • Zango Ads for Bogus Sites That Attempt to Defraud Users.

It looks like Zango wasn't really capable of changing.

With it, the business model of the "legitimate adware company" may be dead as well, not that it had any credible life in recent years. There was a time many years ago when the idea of advertising software like this wasn't completely discredited, but our real-world experience with Zango has done it in. It's all considered "potentially unwanted" at best now.

Security CenterEditor Larry Seltzer has worked in and written about the computer industry since 1983.