180solutions, Hotbar to Merge

Controversial adware company 180solutions has merged with Hotbar, and the new corporate entity will be called Zango, after a 180solutions product family. Financial terms were not disclosed.

“This is a story about momentum for our business in the form of scale,” York Baur, Zango’s EVP of business development, told ClickZ. “In this move, we’ve essentially doubled our network and the amount of inventory available to our advertisers. And by bringing our search-style targeting to that inventory, it allows people to make use of that in a very high-ROI way.”

180solutions, along with other adware vendors like Claria and WhenU, has come under fire in the form of lawsuits filed by both governments and advertisers for its alleged bad distribution practices.

A class-action lawsuit filed in Illinois in September against 180solutions is still pending. In January, The Center for Democracy and Technology filed complaints with the Federal Trade Commission alleging that 180solutions engaged in unfair and deceptive trade activities by fooling users into downloading adware.

The name change is less about distancing itself from any unflattering associations and more about providing clarity to the company’s multiple brands and how they relate, Baur said.

“As one of the founders of the concept, and the leader in desktop advertising, we believe more than ever in the desktop advertising or adware model,” Baur said. “With the hard work that’s gone into provide the right protections for consumers, publishers and advertisers, there’s no reason for us to be in any way sheepish or apologetic.”

After the merger, the 180solutions corporate entity will cease to exist, with all consumer-facing products and the publisher network falling under the Zango brand. The company’s advertiser-facing network, Metrics Direct, will keep its name for the moment, though the company intends to bring that under the Zango brand in the months ahead as well.

180solutions launched the Zango brand six years ago. It has offered various ad-supported tools, including a search assistant, instant messaging application, and the ZangoCash Web publishing and syndication platform. In its current incarnation, Zango is an ad-supported game, video, and download site.

The new Zango will continue to offer ad-supported downloads, adding Hotbar’s email and browser toolbars, which show contextual ads based on the content of the open page in the browser or email application. Delivery of those ads will be taken over by Zango’s ad delivery system.

Of Hotbar’s 150 employees in New York and Tel Aviv, about 50 will depart with Oren Dobronsky, Hotbar’s co-founder and CEO, to build a new comparison shopping venture. Zango will retain 82 of those remaining, while eliminating 20 positions due to redundancies. Zango will end up with more than 200 employees, in Bellevue, Washington, New York and Tel Aviv, Israel.

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