How spyware works?
The term spyware represents a large number of applications which have been designed to gather data about internet user habits and transmit the harvested data to some external entity, usually a marketing firm or possibly a hacker. With the amount of personal data that is being taken from consumers growing daily, it's important for computer users to understand how these programs work.
Spyware programs are often bundled with desirable software such as music and file sharing applications. Once installed, the program can carry out several functions beyond data mining such as changing browser configurations, redirecting internet searches, installing shortcuts and toolbars or otherwise tampering with the 'user experience'. However, these programs are usually created to harvest specific data, such as internet web pages visited, personal data including banking information, or the spyware could simply record every keystroke made by the user.
Though spyware is not designed to damage the host machine, it often creates problems while carrying out its program function. This results in decreased overall system performance and/or an inability to connect to the internet.
In its worst form, spyware could be used for identity theft, credit card fraud, spamming or many other illegal online activities. Machines that are infected by hacker spyware are constantly sending their personal data to an unknown attacker who will often exploit security flaws in the computer to either snoop through files or reroute criminal activity through the infected machine. This type of spyware however is normally grouped with trojans since the spyware is bundled with a trojan horse application.
Most information mined from spyware programs is used for targeted advertising and the application is often accompanied by a built-in adware function. Information that is gathered about the specific user is aggregated and then used to build a detailed profile about their 'likes and dislikes'. The profile serves as the basis for delivering targeted ads directly to the user's machine. However, spyware created by some companies began to venture into greyer areas.
Toolbars are the best example of this trend. These programs integrate with your browser as plug-ins and from there can monitor and report your web surfing habits as well as use this data to rate websites. Some even include a pop-up blocker, making the spyware appear to be a useful tool. Since the toolbar is collecting and distributing personal data, often to unknown third parties, this led to many of these programs being re-classified as spyware by watch groups.
Adware, in particular, often represents a grey area of spyware due to its sometimes legitimate function. For example, some shareware programs will allow users to run their software for free with a stipulation that they would do so with advertising. Since the user isn't paying for the program directly, the shareware authors can make money from the advertising revenues instead. Though users must agree to this arrangement, there are other elements involved that they may be unaware of. For example, the End User License Agreement (EULA) may state that 'anonymous personal data' is being sent to a third party for use in their marketing campaigns. If the user didn't read this but installed the program, they have in fact given their consent, albeit without actual knowledge.
Data mining occurs in almost every area of the internet today. Free email services such as Google and Yahoo use data mining for targeted advertising as well to fund their services. If you've ever sent an email in Google that included one of their flagged keywords, and then noticed that your displayed ads soon all contain that specific word, you have seen how these programs work firsthand. Though Google does not install spyware on your machine in order to do this (they simply use data you've entered into their website), it does call into question how deep data mining goes and how often your personal information and/or preferences are being exposed to third parties without your consent.
The best protection from spyware and anyone who wants to collect your personal information is to read all user agreements before installing any software. Running an anti-malware program as well as a robust firewall can also significantly reduce your chances of infection.