Web marketing company 180solutions Inc. has acquired Hotbar.com Inc., a company that distributes free tools and programs to users along with targeted advertising, the two companies said Wednesday.

180solutions also announced a name-change to Zango, the same as its software product.

Terms of the deal were not released. The companies said in a statement the merger will increase the audience for their advertising software.

Twenty of Hotbar's employees in its New York and Israel offices were laid off, and the remaining 83 will work for Zango, based in Bellevue, Washington.

Zango will continue to offer Hotbar's e-mail and browser toolbars, it said. Hotbar's program also allows for customizable skins for Microsoft Corp.'s Internet Explorer browser and Outlook and Outlook Express e-mail programs, while serving up targeted pop-up ads based on user browsing habits.

The functions of the software offered by companies such as Zango and Hotbar have been under consistent scrutiny.

Hotbar and security vendor Symantec Corp. reached an out-of-court settlement in February after the two sparred over how the Hotbar should be classified. Symantec continues to classify Hotbar's program as low-risk adware and offers a tool to remove it.

Zango's software delivers what it calls time-shifted advertising based on user searches in exchange for free games, videos and other downloads, such as the pervasive smiley-face "emoticons."

If someone searches for a washing machine, an ad relating to appliances could appear in a new browser window two hours later. The software is referred to by security experts as adware or spyware, and can in certain configurations slow down a computer's performance.

In January the Center for Democracy and Technology (CDT), a Washington, D.C., nonprofit group filed a complaint with the U.S. Federal Trade Commission against the company, then called 180solutions.

The CDT alleged the company used deceptive practices to get users to download software. Complaints centered on whether users were properly asked their consent before the software was installed.

Zango said over the last 18 months it has cleaned up its distribution network after concerns the software was spreading through networks of hacked computers. Zango said the software now asks users twice for their consent before it is installed.

Last year, Zango launched a technology called Safe and Secure Search Assistant (S3) that the company says enables quicker detection of unauthorized installations of its software.

IDG News Service

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