VCs Distancing Themselves From Spyware Investments

from the how-quickly-things-change... dept

A year ago, we were surprised that VCs would bother investing in spyware/adware companies when they were so universally hated -- which seemed like it would come back to bite them pretty badly. There were even VCs who went through convoluted arguments trying to define "good" and "bad" spyware companies to figure out who to invest in. In the past six months or so, something changed. Suddenly, the place to be investing was anti-spyware companies, which meant that VCs were basically funding an industry based on wiping out an industry they had funded last year. This even resulted in a few situations where VCs had bets on both sides of the battle. However, with the shift to backing the anti-spyware side, something funny has happened. Almost no one associated with the most famous name in spyware, Claria, will admit to being involved with the company any more. The folks at Silicon Beat heard a rumor that Microsoft was trying to buy Claria -- a bizarre rumor, and one that was quickly denied. However, all of the VCs they tried to reach claimed their investments in Claria were a long time ago, and they had nothing to do with the company any more. The same could be said for the investment bankers who once tried to take the company public. It seems that all these folks who got blinded by the dollars, have finally realized that a business model based on tricking people and pissing them off probably isn't one that's worth being involved in. Not only that, but they're recognizing that it reflects very poorly on them for thinking it was a worthwhile investment in the first place.