Zango Founder Calls it Quits

One of the founders of notorious adware vendor Zango Inc. is leaving the company.

Daniel Todd, who served as the company's president since its inception in 1999, will step down at the end of August, the company said Thursday. "Dan has had an incredible impact on this place and we simply wouldn't be where we are today without him," wrote CEO Keith Smith in a company blog posting.

Todd had been one of the public faces of a company that has been reviled by anti-adware advocates and was named in a US$3 million settlement with the U.S. Federal Trade Commission (FTC) over the company's business practices. Prior to June 2006, the Bellevue, Washington, company did business as 180solutions Inc.

Zango reached its settlement after the FTC found the company deceived consumers as to the nature of its product and made it unduly difficult to remove.

Just last week, Zango was in the news again, when researcher Ben Edelman accused the company of violating the settlement agreement by not providing users with proper disclosure of its terms of service and by showing ads without proper labeling.

Zango's adware gives users free access to videos and games, but it delivers targeted pop-up advertisements in exchange.

Though CEO Smith characterized Todd's departure as planned, it's not clear what he will be doing next. Todd left to "spend more time with his wife and two children and pursue his next opportunity," the company said.

Zango has been trying to shake its adware reputation by repositioning itself as an online media company recently. But it has experienced financial difficulties and is rumored to be in the market for a buyer.

According to a May 25 court declaration by Zango Director of Finance Tom Allan, the company's fortunes took a drop in April of this year. "Prior to that date, Zango had been experiencing a trend of positive revenue momentum. Beginning on or about April 1, that trend abruptly shifted to a trend of sharply negative revenue momentum."

Allan's declaration came in a lawsuit brought by Zango against security vendor PC Tools Pty. Ltd. Zango alleges that PC Tools's Spyware Doctor software removes Zango's software without warning users, and that this has hurt the adware company's business. Zango has also filed a similar lawsuit against Kaspersky Lab Ltd.