Spyware Grows Up

First, they ripped off affiliate links, now they are getting into selling keywords. File-sharing applications such as Morpheus and Kazaa, known to some as spyware and thiefware apps, are evolving from affiliates into full-fledged marketing players. Is it wise to do business with them? Short-term results might lead you to say yes, but the long-term damage you may do to your brand, and your relationships with your partners, might make you think twice.

Most affiliate managers hate per-click programs, knowing that they are rampant with fraud and produce low-quality leads. But garnering lots of clicks is still very tempting, and, for a few of the top file-sharing companies and the other applications that piggyback on their downloads, per-click is proving to be quite lucrative.

If you can deliver good clicks, people will buy them in bundles. Just ask Overture and every Overture spin-off that lacks the traffic to compete. Now, emboldened by their success in the affiliate world, these file-sharing applications are joining the ranks of those spin-offs. Instead of rolling out other company’s products, Kazaa has announced it will use its new search engine application to bring in per-click revenue. This is just one aspect of the real shift going on right now among file-sharing programs, their partners, affiliate programs, and per-click search engines.

The Importance of File-Sharing/Spyware/Thiefware Affiliates

Although the recent furor in the marketing world began with Gator’s grabbing of real estate at the Washington Post and other newspapers, most of these desktop applications — commonly termed spyware and thiefware by Internet pundits — began by making their money through affiliate programs. Players such as Morpheus and Kazaa gained power because the file-sharing craze that began with Napster is still spreading like crazy (just check out the stats at any download site for examples), with millions of users downloading and using the software to get MP3s, porn, videos, and movies. Sometimes these applications came with piggybacking applications, such as WhenU or Gator. Since all of these applications are on the masses’ desktops, they began to become attractive affiliates.

Since the user has downloaded and installed these programs, it is argued that she has chosen to have them perform their marketing antics. But the Washington Post and others, including UPS, which just filed suit this week, argue that Gator is messing with their copyrighted content. Where it’ll come out legally is anyone’s guess, but the impact is being felt in the affiliate industry, as well as in marketing circles throughout the Internet.

Although the control these programs have over users’ desktops make them attractive to affiliate managers, they’re not making any friends among affiliates.

For example, back in April I learned from an industry newsletter about the tricks Morpheus was playing, including:

  • How Morpheus was stealing links from affiliates with technology that replaces their affiliate code with the Morpheus code
  • How Morpheus was replacing a link typed into the browser with its own affiliate link, gaining credit
  • How Morpheus was taking a searched-for link at Overture and inserting its own affiliate link to generate revenue

There was a mild buzz in affiliate circles about these practices, and Morpheus updated its software to adapt to requests. (But don’t forget that software upgrades only work when people upgrade, and many don’t do that too often.) In the end, though, affiliate programs are always about who makes the most sales, and many of these new players started gobbling up real estate and generating real activity, especially with clicks, making them partners and potential partners of affiliate program managers.

Although major newspapers such as The New York Times are finally catching on to the rip-off of affiliate links, these players are moving on to the next thing. Kazaa says it’s trying to go legit, but that has its own challenges. Proceed with caution, but these companies are obviously forces to be reckoned with, given that they’re directly affecting the ownership of the browser on millions of desktops every day.

The new competition in the affiliate world includes everyone from Hotbar to WhenU to Morpheus to Gator and numerous small programs you never notice until they pop up an ad on you. Does it work? Only time will tell….

In my next article, I’ll explore the marketing war between the desktop applications such as Kazaa and the browser. Until then, watch your affiliate links.

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