Venture Capital

by Mike Masnick

Hedging Spyware Investments With Anti-Spyware Ones?

from the one-way-to-build-a-market... dept

A bit of an amusing discussion on a couple of blogs over the past few days. VC Jeff Nolan pointed out that fellow VCs Technology Crossover Ventures appeared to have invested in well-known spyware crapware vendor Gator Claria as well as anti-spyware vendor Webroot. As Nolan points out, that's one way to hedge. The reporters over at Silicon Beat did what reporters do and checked in with TCV to get the full story, which is basically that TCV invested in Gator's early days when they were just a web wallet, not a spyware crapware company -- and they no longer have any real connection to the company. In fact, they joke that they'd love to dump the shares if they could. Of course, that still doesn't explain why they dumped so much into a company that has plenty of competition -- most of it offered for free. It's hard to say which investment looks less appealing.

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  • identicon
    Ben Edelman, 18 Mar 2005 @ 10:40am

    What did TCV know, and when did they know it?

    Here's the problem with TCV's argument:
    TCV says they invested in Gator "several years ago when the company was The Gator Corporation and played in the e-wallet market." The suggestion is that Gator's business has changed completely -- that when TCV invested in Gator, Gator was just an e-wallet company, not a spyware/adware company, not a pop-up ad company. (The implication: TCV wouldn't have invested in Gator had TCV known about Gator's monitoring and advertising plans.)
    Is it true that Gator's monitoring and advertising weren't known as of 2000? I don't think so. See , archiving Gator's EULA as of November 1999. " will seek out high-value offers and great deals from commercial partners that match your interests. will provide this Service to you via email or through 'GatorGrams' or another proprietary instrument of" Lots of euphemisms here. But the underlying practice is clear: Gator will watch what users do, and show advertisements ("offers") accordingly.
    Fact is, TCV invested in Gator at a time when available public information indicated what Gator had in mind. There may or may not be a genuine conflict -- e.g. a PR problem -- between TCV's investment in Gator and its investment in Webroot. But I don't see how TCV can claim that the Gator they invested in wasn't the Gator we all now know. The written record indicates otherwise.

    reply to this | link to this | view in chronology ]

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    reply to this | link to this | view in chronology ]

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