'Spyware' probe leaves L.A. tech stock staggering.Executives of Intermix in·ter·mix tr. & intr.v. in·ter·mixed, in·ter·mix·ing, in·ter·mix·es To mix or become mixed together. [Back-formation from obsolete intermixt, from Latin Media Inc. have been on the defensive since New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Attorney General Eliot Spitzer Eliot Laurence Spitzer (born June 10 1959 ) is an American lawyer, politician and the current Governor of New York. Spitzer was elected governor in the November 2006 election. launched an inquiry into the Internet marketing See Internet advertising. firm's business activities--accusing it of unloading Unloading Selling securities or commodities whose prices are dropping to minimize loss. so-called spyware on unsuspecting customers. Stock in the Los Angeles-based company plummeted more than 35 percent, to $5.18 a share as of April 20, from $8.25 on April 12, when the matter was first disclosed in a conference call. Intermix executives mentioned the inquiry in passing toward the end of the call, which otherwise focused on company guidance for fourth-quarter earnings. But the matter didn't go away. Two days later, after some unflattering news stories and a precipitous drop in its stock price, Intermix issued a press release "correcting inaccurate coverage" of its downloadable software, which the company denies is spyware. Last week, Intermix officials declined comment, providing a statement saying that the company is in discussions with the New York Attorney General's Internet bureau and is cooperating with Spitzer. "Intermix does not promote or condone condone v. 1) to forgive, support, and/or overlook moral or legal failures of another without protest, with the result that it appears that such breaches of moral or legal duties are acceptable. spyware, and remains committed to instituting and promoting best practices on the Internet," the statement said. Spyware is controversial software that covertly gathers information through an Internet connection without the users' knowledge. Spyware applications are usually a hidden component bundled with a free application downloaded from the Internet onto a computer. Their main purpose is to monitor activity by reading a computer's "cookies"--information about what users look at on the Internet and what they buy. It can then transmit the information to a third party, usually for advertising or marketing purposes. Some spyware also can aggravate users by changing settings like their home page--so much so that the House and Senate passed anti-spyware bills last year that if enacted would bring penalties of up to $3 million for violators. "This is essentially infiltrating infiltrating adjective Referring to a tumor that penetrates the normal, surrounding tissue people's personal computers and adjusting them in a way so they operate to the benefit of these third parties," said Scott Kessler, an analyst with Standard & Poors. "And it's all unbeknownst to the user himself." Dealing with downloads Spitzer's office hasn't commented on the probe. A Securities and Exchange Commission filing by Intermix discloses that Spitzer has launched an inquiry into the company's practices, though it did not use the word "spyware" to describe what is being questioned. The filing further notes that Spitzer's office is considering an action against the company for what it calls "unlawful and deceptive de·cep·tive adj. Deceptive or tending to deceive. de·cep  tive·ness n. acts and practices" associated with Intermix's
toolbar A row or column of on-screen buttons used to activate functions in the application. Many toolbars are customizable, letting you add and delete buttons as required. Toolbars may be fixed in position or may float, which means they can be dragged to a more convenient location in the , redirect re·di·rect tr.v. re·di·rect·ed, re·di·rect·ing, re·di·rects To change the direction or course of. n. A redirect examination. re and ad serving applications. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the filing, the Attorney General's Office asserts that the downloads were distributed "without sufficient notice or consent" and are difficult to remove. Intermix owns several social websites, including the popular MySpace.com, where users find dates and share information with other members about music and band performances. The company also distributes animated jokes, greetings, games and trivia. It reported net income of $38,000 for the third quarter ended Dec. 31, compared with a restated loss of $2.1 million in the year-ago period when the company was called eUniverse Inc. Revenues were $20.3 million in the most recent third quarter; year-ago quarterly revenues were not available. About half of Intermix's revenues come from paid advertising on its social sites and the other half from its online marketing division Alena, which sells beauty and skincare products through profit-sharing partnerships with vendors. As eUniverse, the company offered a hodgepodge hodge·podge n. A mixture of dissimilar ingredients; a jumble. [Alteration of Middle English hochepot, from Old French, stew; see hotchpot. of downloadable games, quizzes, cartoons, and a search toolbar that promised faster navigation through the Web--most of which are still distributed on Intermix Media's website. It is these applications that apparently attracted Spitzer's attention. The toolbar allegedly gathers information from the user's Internet searches, and the "redirect" applications automatically dump the user to certain Web sites. Because the actions are done without proper consent from the user, they have been labeled spyware by Computer Associates International Inc., which maintains a fist of online "pests." Intermix insists that its products have been inaccurately described, claiming in a press release that the toolbar and redirect applications do not collect information about a person's Web surfing Refers to jumping from page to page on the Web. Just as in "TV channel surfing," where one clicks the remote to go from channel to channel, the hyperlink on Web pages makes it easy to jump from one page to another. habits or transmit any personal information. Nevertheless, it stopped offering the applications for download last week. The company announced that it would not resume the downloads "until every precaution is taken to ensure that users are fully informed about and consent to the installation of the applications during the download process." The toolbar and navigation software contributes "just a couple of hundred thousand in revenue, that's it," said John Tinker John Tinker may refer to:
LLC - Logical Link Control , who owns Intermix stock. "They're in it in a very minute way, and they've been phasing it out," he added. Still, he admitted, "The stock will be hurt until this gets cleared up." Intermix Media Inc. Stock Prices [GRAPHIC OMITTED] Quarterly Net Income (millions) [GRAPHIC OMITTED] YEAR (March 31) 2004 2003 * Revenue (millions) $57.3 $65.7 Total Expenses (millions) 69.7 64.6 Operating Income (millions) 12.4 1.1 Net Income (Loss) (millions) (13.1) 0.5 Earnings (Loss) Per Share ($0.49) $0.02 SUMMARY Business: Internet marketing Headquarters: Los Angeles CEO: Richard Rosenblatt Market Cap: $210 million Dividend Yield: None Total Liabilities: $16.1 million P/E Ratio: N/A ** Long-Term Debt: $0 * 2003 results were reclassified. ** Company is not profitable. |
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