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The Courtroom: Eliot Spitzer black balls spyware Intermix, funded by educators |
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Excerpt with CC including hyperlinks: "Intermix owns and operates a wide range of web sites, including mycoolscreen.com, cursorzone.com and flowgo.com, which advertised "free" software available for download, including screensavers, screen cursors and games. The Attorney General found that along with these programs, Intermix secretly downloaded a number of ad-delivery programs. One such program was called "KeenValue" and it delivered pop-up ads to its unsuspecting users. Another program, "IncrediFind," redirected web addresses to Intermix's proprietary search engine. Other programs placed advertising "toolbars" on users' screens.
The Attorney General documented at least ten separate web sites from which Intermix or its agents were downloading spyware, providing either no warning or other misleading disclosures. In this way, Intermix and its agents downloaded more than 3.7 million programs to New Yorkers alone, and tens of millions more to users across the nation.
Intermix also went to great lengths to protect the spyware and adware it secretly installed. The programs were hidden in unlikely locations on the computer and could not be removed through a computer's "Add/Remove" function. In addition, the programs omitted "un-install" applications, and even reinstalled themselves after being deleted.
The Attorney General's suit seeks a court order enjoining Intermix from secretly installing spyware, an accounting of all revenues made on these products, and payment of penalties. "
Intermix Media, Inc.Verified Petition
Brookman Affirmation
Intermix however tends to disagree. Mid-April Intermix refuted the spyware label citing:
"The company's toolbar and redirect applications do not collect information about a person's web surfing habits or otherwise collect or transmit any personal information about users."
According to Intermix's press release as a result of this lawsuit:
"The company has decided to cease distribution of its redirect and toolbar applications pending a thorough review of the issues raised by the NY AG's office. The Company will not reintroduce those applications as downloads until every precaution is taken to ensure that users are fully informed about and consent to the installation of the applications during the download process and that the applications, once installed, can be located and removed easily"
Since Intermix is traded on the stock market, they have to issue more press releases. An excerpt from the newest one:
"Shares of the company, Intermix Media Inc. of Los Angeles, fell 55 cents, or 11 percent, to $4.25 in midday trading on the American Stock Exchange. "
And just before the lawsuit, Intermix released a press release about positive growth in 2005 and 2006:
"The Company expects fiscal year 2006 revenues to be between $112 and $115 million, which represents an increase of approximately 40-45% over preliminary fiscal year 2005 results. The Company expects net income for fiscal year 2006 to be approximately $8 million, or 17 cents per fully diluted share prior to allocation of income to preferred stockholders, and expects EBITDA to be approximately $12 million. "
And oh, they did mention how much net revenue they made from NY residents:
"The Company predominantly derives revenue from these applications through users' conduct of search queries and clicks on search results. Intermix estimates that, since inception, it generated a total of approximately $250,000 in net revenue attributable to downloads by New York state consumers. "
A nice graph made possible by Yahoo Biz shows that "MIX" is currently trading lower yet again, but is still above the Nov and Dec 2004 trading levels. Follow the latest business headlines here as they develop.
Worthy of notation, Intermix used to be called eUniverse. In an odd twist at The Street, Kevin Kelleher starts off with this comment:
"Second chances are rare for dot-com also-rans, but the rebound in Intermix (MIX:Amex - commentary - research) could give tech investors something to talk about. "
A second chance for what? To keep installing their spyware infested products onto consumer's computers without their knowledge in a bid to raise their stock price? What kind of investors would pitch their money for such a scheme, and just who are the stock holders that drive the company?
Ok, lets look at the major stock holders:
Each of them has a twist unto their own, but lets focus on Intermix's CEO for a moment: Richard Rosenblatt, who The Street refers to as "a 35-year-old Internet veteran whose tousled hair and chipper persona make him look like he stepped out of a Dawson's Creek spinoff."
The article adds to this:
"Rosenblatt founded two companies, iMall and GreatDomains, selling them to Excite@Home for $565 million and VeriSign (VRSN:Nasdaq - commentary - research) for $100 million, respectively. Rosenblatt set up a venture firm, Prime Ventures, and briefly signed on as CEO of drkoop.com, after the medical content site had reached critical condition. "
Richard holds 225,500 shares of MIX Stock. But even more shocking is who the top Mutual Fund owners are! SCARY:
Tiaa-Cref!
About Tiaa-Cref:
"TIAA-CREF is a group of companies that includes Teachers Insurance and Annuity Association, College Retirement Equities Fund and various affiliates. TIAA-CREF is one of the most respected financial service providers in the world.
Today, the TIAA-CREF group of companies provides an expanding range of investment and insurance services to those in education and their families -- and people everywhere who appreciate our commitment to value, performance, integrity, and service. "
So Intermix (MIX) is not just a publicly owned company, it is funded by an an academia focused retirement fund who pitches "commitment to value, performance, integrity, and service."
The Street continues on page 2:
"Since Rosenblatt took over in February 2004, the company has found an experienced CFO, changed its name, sold off unprofitable businesses and won respected advertisers like Procter & Gamble (PG:NYSE - commentary - research), Nike (NKE:NYSE - commentary - research) and HSBC (HBC:NYSE ADR - commentary - research). He couldn't persuade Nasdaq to relist the stock, so the company listed it on Amex in November. "
Brings a whole new meaning to Nike's "Just do it" attitude. This is such a tangled web of information. Don't investors look at the moral fiber of a company? Go get'em Eliot!
Updated: It isn't just TIAA-CREF, there are other retirement programs involved that stand to get a pretty penny on their insider sales: CALIFORNIA STATE TEACHERS RET SYS planned sale estimated to bring in $1,553,992 and the NEW YORK ST TCHR RTRMT estimated to bring in $757,575.
I had a discussion with Stephanie from TIAA-CREF's Media Department. Currently they are unaware of the NY-AG's lawsuit and will research this. A callback has been promised with TIAA-CREF's official comment. Stay tuned.
Note: Updated end of article, read for more.
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