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Spitzer puts another firm in spyware crosshairs

New York's attorney general alleges that Direct Revenue secretly installed millions of spyware programs that popped up ads.

New York Attorney General Eliot Spitzer said on Tuesday he has sued Direct Revenue, charging the Internet marketer with secretly installing millions of spyware programs that sent unsolicited advertisements to users' computers.

Spitzer said in a statement that Direct Revenue secretly bundled spyware into offers for free games or other applications. The software tracked users' Internet habits and caused pop-up ads to appear, he said.

The lawsuit, filed in Supreme Court of the State of New York, seeks an order barring Direct Revenue from secretly installing spyware or sending ads through existing spyware programs.

Spitzer also asked the court to compel the company to account for its revenue and pay unspecified monetary penalties.

Spitzer has been pursuing companies involved in alleged Internet fraud and other misconduct.

Last year, he reached a $7.5 million settlement with Intermix Media after suing the company for bundling hidden spyware along with millions of programs it gave away for free. Intermix owns the popular MySpace social networking site and was later purchased by News Corp.

The attorney general contends that Direct Revenue "deliberately designed spyware that, once downloaded, was extremely difficult for users to detect and remove."

Direct Revenue describes itself as a marketing company that provides "useful content and free software" in exchange for delivering targeted advertising messages with the permission of consumers, according to its Web site.

Company officials could not immediately be reached for comment.