Although it’s set to fork out $3 million as part of a settlement with the Federal Trade Commission, free adware-manufacturing company Zango (formerly 180Solutions) once again has found itself in hot water.
Zango last week settled with the FTC over disputes that the company deceptively installed unsolicited adware onto user PCs and obstructed its removal.
According to a cautionary post made on the site of Websense Security Labs, a number of user pages—including links to a faux YouTube video that contains ZangoCash Toolbar software embedded into it—still are up and running on MySpace. When users click on the video, they are directed to a copy of the video hosted on a site called YooTube.info. A “click here for the full video” button then redirects users to a Microsoft Windows Media video that requires users to accept the end-user licensing agreement in order to watch the video. When users accept the agreement, the video downloads—along with a ZangoCash setup.exe file.
Websense claims that the fraudulent YouTube imposter site is hosted in Amsterdam and was fraudulently registered.
Zango, however, denies any wrongdoing, saying that it is working within the guidelines set down by the FTC. According to company spokesperson Steve Stratz, Zango has not targeted MySpace since July, when two Zango profiles containing links to adware were removed.
“Websense found a video that people on the Web are posting onto their MySpace profiles,” Stratz told AVNOnline.com. “That’s it. They are not adult videos in any fashion. It says in plain language that, if you want to watch this video, you’re going to have to download Zango. As part of Zango, you’re going to get ads in return for getting this content for free. As part of that, you’re going to get the Zango Search Assistant and the Zango Toolbar.
“Basically, what you have here is a security-scanning application company making some accusations against a company like ours,” Stratz continued. “It’s pretty simple to figure out.”
Stratz said that, while Zango did not post the videos, “we don’t discourage the virality of our content.” However, he stressed that “we do not target MySpace one iota. We had some issues earlier in the year, but immediately ceased those once we learned that as part of the MySpace user terms, a user could not commercially benefit from their network.”
Zango has been plagued by controversy surrounding its free adware installations, which during the past several months have been found embedded into several unrelated software and video links.
This is not the first instance involving the use of MySpace. In July, it was reported that Zango adware was discovered on a pair of Zango profiles that contained video clips embedded with Zango Assistant and Search Toolbar software. Users were required to accept the download in order to view the videos. At the time, Zango blamed the sites on a Montreal-based, third-party developer “who was exploring possible opportunities, but he didn’t realize it was Zango business practices not to target MySpace,” Stratz said at the time.
Also in July, a potential content deal between Zango and Warner Bros. soured when a Zango ad placed on the Warner Bros. site and featuring several well-known cartoon characters turned out to contain a link to adult-oriented ads. It was reported that Zango was promoting a “kiddie porn browser,” and the company was accused of unethical practices and luring underage users to adult content. Zango subsequently denied the charges, saying that it erroneously had bundled its software with a browser called Yapbrowser that led users to a 404 error page containing adult content.
Meanwhile, in September, a class-action suit against Zango in protest of its desktop advertising software was dropped when the three plaintiffs decided the suit would not be the best vehicle to go after the company.
While many regularly willingly download Zango products from the company’s homepage, the hidden adware has caused the company considerable bad press. As a stipulation of last week’s settlement with the FTC, Zango was ordered to stop any practices that may result in the unsolicited downloading of its adware products. Zango’s Kevin Smith conceded that the company had “relied too heavily on our affiliates to enforce our consumer notice and consent policies,” which “allowed deceptive third parties to exploit our system to the detriment of consumers, advertisers, and our publishing partners.”
Smith pledged that Zango would adhere to the terms of the settlement, adding, “We embrace the new standards and will continue to create, abide by and strive for the best practices that protect consumers.”
In talking with AVNOnline.com, Stratz emphasized that Zango has been adhering to guidelines set down by the FTC for all companies to follow. “They put forth a number of industry standards for the downloading of software over the Internet. As part of the agreement, they looked through our business practices from 2002 to 2005 [and determined that] as of Jan. 1, 2006, all of the practices that we have been evolving to have met their standards.
“The key parts of the orders were for clear notice and consent practices and uninstall practices,” Stratz continued. “And, in their order, the FTC says that they recognize that as of Jan. 1, 2006, we are doing all the right things.”
The audibly frustrated Stratz went on to echo the comments he made last week in regard to trusting affiliates. “We’ve taken responsibility and apologized for the actions of some of our third-party affiliates. We trusted people, and we learned a very valuable lesson in who to trust. But, we’ve talked very publicly over the last three years about the things that we have been doing to combat that.”
Stratz said Zango has been receiving several calls since Websense made its post about the faux YouTube video. “When a company like Websense says one thing and everyone believes it, it’s very frustrating,” he commented. “They can say whatever they want, but as of Jan 1. 2006, we meet the FTC guidelines for [ethical practices].”
