Webopedia.com defines spyware as Any software that covertly gathers user information through the user's Internet connection without his or her knowledge, usually for advertising purposes. Spyware applications are typically bundled as a hidden component of freeware or shareware programs that can be downloaded from the Internet; however, it should be noted that the majority of shareware and freeware applications do not come with spyware. Once installed, the spyware monitors user activity on the Internet and transmits that information in the background to someone else. Spyware can also gather information about e-mail addresses and even passwords and credit card numbers.
Is Spyware bad?
In general, spyware is not designed to be harmful to you - except for violating your privacy. Spyware can be as benign as cookies that simply track sites you've visited on the Web and market to you based on that information. Or, spyware can be so sophisticated as to track your keystrokes when you're logging into online banking. By the time spyware is doing things like logging keystrokes, however, it's entering the realm of being a virus. Spyware programs tend to be badly written. As a result, they may make your computer perform badly or even crash.
Is spyware illegal?
Even though the name may indicate so, Spyware is not an illegal type of software in any way. However there are certain issues that a privacy oriented user may object to and therefore prefer not to use the product. This usually involves the tracking and sending of data and statistics via a server installed on the user's PC and the use of your Internet connection in the background.
What else can spyware do?
"Browser Helper Objects" are the holes in Internet Explorer that spyware exploits. A lot of spyware creates a BHO that can take over the browser. It might change the home page or redirect you to a page other than the one you chose in the address line. The BHO might tell your computer, "If Sam asks to go to www.creditunion.org, send him to www.bank.com."
What's the hype about?
While legitimate adware companies will disclose the nature of data that is collected and transmitted in their privacy statement. There is almost no way for the user to actually control what data is being sent. The fact is that the technology is in theory capable of sending much more than just banner statistics - and this is why many people feel uncomfortable with the idea.
On the other hand...
Millions of people are using advertising supported "spyware" products and could not care less about the privacy hype..., in fact some "Spyware" programs are among the most popular downloads on the Internet.
There are also many PC surveillance tools that allow a user to monitor all kinds of activity on a computer, ranging from keystroke capture, snapshots, email logging, chat logging and just about everything else. These tools are often designed for parents, businesses and similar environments, but can be easily abused if they are installed on your computer without your knowledge. These tools are perfectly legal in most places, but, just like an ordinary tape recorder, if they are abused, they can seriously violate your privacy.
So what can be done about spyware?
Software exists for detecting and eliminating spyware. These programs work like virus software, except that they are not in real time. Computer users actually need to run them to have them scan your machine. Spyware is an issue that's getting the attention of Congress because it exploits people's privacy.