Aussie analysts advise Microsoft against adware acquisition

Jul 04, 2005: Microsoft has been advertised not to buy controversial adware firm Claria, because of double standards and the risk of upsetting customers by supporting the deployment of unwanted adware.

Graham Titterington, an analyst at Ovum, said that Microsoft is apparently in talks to buy Claria in a bid to establish an advertising network to compete with rivals Google and Yahoo.

Claria has claimed that it made US$100 million in revenues last year from advertisers, and that its software was on more than 40 million PCs by the end of 2004.

Titterington has advised Microsoft not to make the acquisition because of the issue of perception.

"It will damage Microsoft's reputation for trust, and refuel fears of creeping monopolisation. Microsoft has to decide where it stands. It is possible to differentiate between spyware and adware, and there are advantages in having adware delivered by a trusted channel.

"But Microsoft has taken up the banner against spam and unsolicited content while browsing. IN the last 18 months, it has taken legal action against over 100 spammers in EMEA alone. If it now gets in on the act itself, it will look like it has been clearing the turf in order to monopolise another sector of the IT industry."

Titterington added that users would not be happy with receiving adware after paying for Microsoft products.

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