Reports: Microsoft May Buy Adware Developer

Microsoft has been discussing the possibility of buying a developer of adware, Claria, according to reports published in U.S. newspapers Thursday. However, the deal is in danger of falling through, in part because of concerns about how such a move would be seen by the public, the reports said.

Adware companies such as Claria use software installed on a Web surfer's computer to collect information on surfing habits and use it to target pop-up advertisements based on the surfer's interests or online activities.

Buying an adware company could allow Microsoft to better exploit advertising opportunities around its MSN search engine and other Web properties.

Microsoft officials were not immediately available to comment on the reports.

Getting a Look at Gator

Claria is known for its Gator adware. It changed its name from Gator in 2003. Claria's other products include a Web browser toolbar called DashBar and a personalized weather information service called Weatherscope, which offer free services in return for users accepting the display of advertisements based on their Internet usage.

It was Claria that first approached Microsoft, earlier this year, with an offer to use its BehaviorLink service to track usage patterns and target adverts, according to The New York Times.

There are fears within Microsoft that gathering such usage information could lead to a backlash against the company, according to the Times' report and another in The Wall Street Journal.

Microsoft and Claria have talking about a deal for two weeks, and discussed a price of $500 million as recently as Wednesday, according to the Times.