Spyware

Spyware is a type of malware (malicious software) installed on computers that collects information about users without their knowledge. The presence of spyware is typically hidden from the user and can be difficult to detect. Spyware is often secretly installed on a user's personal computer without their knowledge. However, some spyware such as keyloggers may be installed by the owner of a shared, corporate, or public computer on purpose in order to intentionally monitor users. Sometimes, spyware is included along with genuine software, and may come from an official software vendor. In an attempt to increase the understanding of spyware, a more formal classification of its included software types is provided by the term privacy-invasive software. In response to the emergence of spyware, a small industry has sprung up dealing in anti-spyware software. Running anti-spyware software has become a widely recognized element of computer security practices for computers, especially those running Microsoft Windows. A number of jurisdictions have passed anti-spyware laws, which usually target any software that is surreptitiously installed to control a user's computer.

Why is it called "Spyware" ?

While this may be a great concept, the downside is that the advertising companies also install additional tracking software on your system, which is continuously "calling home", using your Internet connection and reports statistical data to the "mothership". While according to the privacy policies of the companies, there will be no sensitive or identifying data collected from your system and you shall remain anonymous, it still remains the fact, that you have a "live" server sitting on your PC that is sending information about you and your surfing habits to a remote location.

Real spyware...
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.

Web bug
A web bug is an object that is embedded in a web page or email and is usually invisible to the user but allows checking that a user has viewed the page or email.[1] One common use is in email tracking. Alternative names are web beacon, tracking bug, and tag or page tag. Common names for web bugs implemented through an embedded image include tracking pixel, pixel tag, 11 gif, and clear gif.[2] In some cases it may be considered a breach of personal privacy.

A web bug is any one of a number of techniques used to track who is reading a web page or email, when, and from what computer. They can also be used to see if an email was read or forwarded to someone else, or if a web page was copied to another website. The first web bugs were small images. Some emails and web pages are not wholly self-contained. They may refer to content on another server, rather than including the content directly. When an email client or web browser prepares such an email or web page for display, it ordinarily sends a request to the server to send the additional content. These requests typically include the IP address of the requesting computer, the time the content was requested, the type of web browser that made the request, and the existence of cookies previously set by that server. The server can store all of this information, and associate it with a unique tracking token attached to the content request. A Web bug, also known as a Web beacon, is a file object that is placed on a Web page or in an email message to monitor user behavior. Unlike a cookie, which can be accepted or declined by a browser user, a Web bug arrives as just another GIF or other file object. It can usually only be detected if the user looks at the source version of the page to find a tag that loads from a different Web server than the rest of the page. Although proponents of Internet privacy object to the use of Web bugs in general, most concede that Web bugs can be put to positive use, for example to track copyright violations on the Web. According to Richard M. Smith, a Web bug can gather the following statistics:

The IP address of the computer that fetched the Web bug. The URL of the page that the Web bug is located on. The URL of the Web bug. The time the Web bug was viewed. The type of browser that fetched the Web bug. A previously set cookie value.

Web bugs are often used by spammers to validate e-mail addresses. When a recipient opens an email message that includes a Web bug, information returned to the sender indicates that the message has been opened, which confirms that the email address is valid.

Cookie
A cookie is information that a Web site puts on your hard disk so that it can remember something about you at a later time. (More technically, it is information for future use that is stored by the server on the client side of a client/server communication.) Typically, a cookie records your preferences when using a particular site. Using the Web's Hypertext Transfer Protocol (HTTP),

each request for a Web page is independent of all other requests. For this reason, the Web page server has no memory of what pages it has sent to a user previously or anything about your previous visits. A cookie is a mechanism that allows the server to store its own information about a user on the user's own computer. You can view the cookies that have been stored on your hard disk (although the content stored in each cookie may not make much sense to you). The location of the cookies depends on the browser. Internet Explorer stores each cookie as a separate file under a Windows subdirectory. Netscape stores all cookies in a single cookies.txt fle. Opera stores them in a single cookies.dat file. Cookies are commonly used to rotate the banner ads that a site sends so that it doesn't keep sending the same ad as it sends you a succession of requested pages. They can also be used to customize pages for you based on your browser type or other information you may have provided the Web site. Web users must agree to let cookies be saved for them, but, in general, it helps Web sites to serve users better. Cookies are small files that websites put on your computer hard disk drive when you first visit. Think of a cookie as an identification card that's uniquely yours. Its job is to notify the site when you've returned. While it is possible to misuse a cookie in cases where there is personal data in it, cookies by themselves are not malicious. Many websites, including Microsoft's, use cookies. Cookies tell us how often you visit pages, which helps us learn what information interests you. In this way, we can give you more of the content you like and less of the content you don't. Cookies can help you be more efficient. Have you ever put something in a virtual shopping cart in an online store and then returned a few days later to find that the item is still there? That's an example of cookies at work. Cookies let you store preferences and user names, register products and services, and personalize pages. But if you never register or leave personal information at a site, then the server only knows that someone with your cookie has returned to the website. It doesn't know anything else.