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As I blogged a while ago, there’s mucho bucks in adware/spyware.

I’m not sure it’s 2.4 billion, though. That number surprises me (note that it’s possible that the words “profit” and “revenue” have been reversed, as is commonly the case in the press).

Stiennon is a super smart guy (and a worthy competitor) but I think his logic is way off, if this article is an indication of where his thinking is (Thanks, Ben for the link).

I think the total profits (not revenue) in the adware business are between $250 and $500 million based on some very rough math (and it is very rough).

Claria has at least $30 mill in pre-tax. 180 has about 300 employees, and they are very profitable Given that $200k average revenue per employee is fairly realistic, that would make them a company between $50-$60 million. Figuring that they had the same kind of incredible pre-tax as Claria (30%), that puts their pre-tax profit at around $18 mill.

Then the other big ones are Direct Revenue, eXact Advertising, etc. Maybe 10 other guys of note. However, not all of these will be profitable.

The distributors make money, because they get (probably) between 3-25 cents per install. But if that total number of profit was more than 100 million, I would be surprised.

Note that this one quote from the article raised eyebrows here:

“180solutions spokesperson Howard Barokas said Stiennon’s projected $86 million profit for 180solutions was probably too high. He also differentiated the 180solutions software from others on the list, indicating that 180solutions and its Zango software have a clear desktop icon, provide a “double opt-in” for installation, and are labeled clearly.”

I myself just had a stealth install of 180 adware just a couple of days ago on a Vmware test system I was running.

Alex Eckelberry

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