Spyware is any software that covertly gathers your information through your Internet connection without your knowledge, usually for advertising purposes. Spyware applications are typically bundled as a hidden component of freeware or shareware programs that can be downloaded from the Internet; however, it should be noted that most shareware and freeware applications do not come with embedded spyware. Once installed, the spyware monitors your activity on the Internet and transmits that information in the background to someone else. Spyware can also gather information about e-mail addresses and even passwords and credit card numbers.
Spyware is similar to a trojan horse virus in that you unwittingly install the product when you install something else. A common way to become a victim of spyware is to download certain peer-to-peer file swapping products that are available today; such as bearshare, livid, napster, and others.
Aside from the questions of ethics and privacy, spyware steals from your computer’s memory resources and diminishes bandwidth as it sends information back to the spyware’s home base via the your Internet connection. Because spyware is using memory and system resources, the applications running in the background can lead to system slowness, crashes, or general system instability.
Because spyware exists as independent executable programs, it has the ability to monitor keystrokes, scan files on the hard drive, snoop other applications, such as chat programs or word processors, install other spyware programs, read cookies, change the default home page on the web browser, consistently relaying this information back to the spyware author who will either use it for advertising/marketing purposes or sell the information to another party.