August 27, 2001 6:35 PM PDT

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  Gator defends custom ads
Jeff McFadden, CEO, Gator
August 13, 2001
An influential advertising trade group is publicly criticizing software company Gator for tampering with the already troubled online ad market.

Robin Webster, chief executive of the Interactive Advertising Bureau (IAB), said the group's board of directors is demanding that Gator stop its practice of selling ads designed to intentionally block those sold on its members' Web sites. The IAB, which represents the $8 billion online ad business, also is considering pressing the issue with the Federal Trade Commission.

Redwood City, Calif.-based Gator, has created software that displays online ads in two creative but controversial ways. Under one method, a person who is visiting a flower-delivery company's Web site, for example, might receive a so-called pop-up ad for a rival site.

In addition, Gator is able to paste ads of the same dimensions on top of the banner ads being used on popular sites such as Yahoo. Critics have compared the technology to intercepting Time magazine as it is mailed to readers' homes and gluing a new ad over the back page.

As first reported by CNET News.com, Gator's ad-delivery software is included in a so-called helper application that manages passwords and user IDs. It has been installed on more than 8 million computers.

"By placing ads on other companies' Web sites without their authorization, this deceives the consumer by visually altering the Web sites; it falsely suggests some affiliation between the Gator ads and the host Web site, and it interferes with the revenues of the Web sites," the IAB's Webster said.

"This is pretty serious stuff, and we want them to stop," she said.

In an e-mail interview, Gator CEO Jeff McFadden said his company is operating within its rights.

"We have the right to display this form of advertising. Web site publishers offer consumers free content that comes with advertising, and we do something very similar. We're a software publisher that offers consumers free software applications that come with advertising," McFadden wrote.

The IAB's complaint punctuates swelling animosity toward plug-in applications that can be used to push Web advertising in new, and sometimes manipulative, ways. Gator's software is among a collection of applications taking heat from Web site operators, who are angry that their content, without their consent, can be changed in the name of marketing. But creators of Gator and other "adware" plug-ins say they make advertising more effective and help consumers find what they're looking for faster.

Other plug-ins such as Flyswat and Amazon's zBubbles have attempted to overlay content onto Web pages through their applications but have largely failed to spark consumer interest. Use of applications such as Gator and TopText is spreading fast because they are bundled with Kazaa and iMesh, two popular programs for finding and downloading music.

The concerns highlight the double-edged sword held by Web publishers as they embrace intrusive advertising technology to lure marketers. Faced with weak advertising sales, online publishers have turned to big, intrusive ad formats such as pop-unders to draw reluctant marketers online--often at the risk of alienating visitors. But now Web publishers are finding that technology used to deliver fancy, interactive ads can also be used in a way that risks undermining an already hobbled market.

"Just because you can do it doesn't make it right," Webster said.

Michael Zimbalist, acting executive director for the Online Publishers Association, which represents the likes of The New York Times and the Wall Street Journal Online, said he also is concerned about Gator's software and is "studying options."

"As an industry, it's something that we should definitely go after. Any organization devoted to addressing the interests of online media needs to be concerned about any third parties that interfere with the delivery of that media to its intended recipients," Zimbalist said.

"It's really unfair competition that's going on when one company can interpose itself between a publisher and the audience."

Running with consent
Those evaluating the legality of software such as Gator's say there are some subtle issues at work given that consumers are theoretically signing up to receive its service.

However, many consumers complain that they are not given proper notice before receiving the application or the advertising along with it.

Consumers and Web site owners alike have been actively complaining on message boards about software from Gator and other plug-ins that sell contextual advertising, or highlighted links to keywords across the Net. TopText, created by San Francisco-based eZula, is one of the main players in this market and has drawn some harsh complaints from Web users, including a Web page devoted to tearing down the practice.

TopText, an add-on program bundled with third-party software such as Kazaa and iMesh, attaches itself to the consumers' Web browser and works on all Web pages. Its gold-colored links highlight more than 7,000 keywords sold through eZula's network. A Kazaa or iMesh subscriber searching Yahoo, for example, might see a yellow link on the word "travel" that, if clicked on, could take the visitor to another travel site.

Jim Wilson, an Orange County, Calif.-resident and publisher of Webmaster site Jimworld.com, said he posted a message about TopText and received hundreds of outraged responses. This prompted him to create a page called Scumware.com to educate site owners on software such as Gator's Offer Companion and TopText. His site has a community of more than 350,000 Web site operators.

"When someone comes to Jimworld and the banner is replaced by one sold by Gator, then I have just been cheated out of the revenue that comes from that advertising," he said. "The sad thing is the day Gator came out, I recommended it."

Wilson said the TopText hyperlinks manipulate his Web site in much the same way, altering his intended content and giving him no way to "opt out" of the service.

An eZula representative said that consumers are well-informed of the software's purpose and functions before they install it on their machines. And because consumers consent to operate the software and it does not technically alter content on any Web page, it is legal.

Wilson said that he is going to show his support for the IAB's efforts in whatever action they take against such services.

Taking action
Among its options, the IAB may complain to the FTC that Gator is engaging in unfair business practices. Webster added that an IAB member could file a lawsuit against the company. In such an event, Webster would rally support from other members to get behind a lawsuit.

She added that some IAB members are discussing a lawsuit, though she would not give names. IAB members include ad networks such as DoubleClick and Web publishers including Advertising Age and Salon.com.

Webster says the IAB has a problem with its practice of selling ads that "poach off other sites advertising" because the company has not been invited by that Web site.

"At this point, it's a violation of property rights," she said. "For another party to come in and either cover up your editorial or another ad that they have sold is not fair. They are poaching off other Web sites and making money off that."

Webster sits on the IAB board of directors with members including Jeffrey Mahl, president of Gemstar TV Guide International's Media Sales Group; About.com CEO Scott Kurnit; and Shelby Bonnie, CEO of CNET Networks, publisher of News.com.

Webster said she has had one conversation with McFadden, but so far he has not expressed a willingness to change his company's practice.

"I'm hopeful that I'm going to get a call from Jeff McFadden saying that they're not going to continue that particular practice. And if we don't hear that, then we'll have to take action," Webster said.

Rhonda Gorman, a Tampa, Fla.-based Webmaster, said she's concerned by the secretive way many of such programs are installed on machines and complained that they don't give site owners the option to block the advertising.

"Users have a right to see the Web they want to, and Webmasters have a right to show their sites they way they want it," Gorman said. "I don't know at what point that the user's right supersedes the creators' rights."

 

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