These are tough times for Zango. The Bellevue-based software firm, which was founded in 1999, has repeatedly raised the ire of consumers, internet privacy advocates and even the Federal Trade Commission (FTC).
The scrutiny, it seems, is well-deserved. In the period between 2001 and 2006, Zango (then known as 180Solutions before its 2006 merger with Hotbar) was one of the internet’s largest producers of “adware,” that noxious, aggravating software that floods your computer with pop-up advertisements, which are often extremely difficult to remove—and also perfectly legal.
Company officials argued that independent software-vending partners were at fault for the millions of controversial, “nonconsensual” downloads of Zango’s pop-up products. The FTC, however, wasn’t convinced. In November 2006, Zango reached a $3 million settlement with the FTC over charges of “deceptive failure to disclose adware,” “unfair installation of adware” and “unfair uninstall practices.”
Since the settlement, Zango has taken steps to correct its past business practices and embark on a new direction. In June, responding to continued pressure from frustrated web users, the company rolled out Platrium, an online casual-gaming platform that will take Zango away from its traditional pop-up ad formats. The reorganization cost 68 workers their jobs, including executive vice president of corporate development York Baur and CTO Ken Smith, who co-founded the firm with his brother, CEO Keith Smith.
Some privacy experts, such as Benjamin Edelman, an assistant professor at Harvard Business School, contend that Zango still violates industry standards. Edelman claims that the company still shows unlicensed, copyrighted videos; imporperly labeled pornographic material; and material that is available elsewhere without “pop-ups or other detriments.”
Zango spokesman Steve Stratz says that Zango has fixed the problems that once plagued it. For starters, the company instituted rigorous consumer-notification, consent and uninstall standards for its Platrium product.
“We’ve addressed basically every concern in the marketplace,” Stratz says. “We’ve come out on the other side as a better company and as a better product for consumers... We’ve learned from the past.”