Web marketing outfit Intermix has agreed to pay $7.5m over three years to settle an adware lawsuit brought by New York Attorney General Eliot 'The Blitzer' Spitzer. Under the terms of a tentative agreement, Intermix agrees never to distribute adware again.

Intermix - which admits no wrongdoing in the proposed settlement - claims it voluntarily stopped distributing its contentious adware, redirect and toolbar programs some unspecified time ago. Spitzer's office filed a suit against Los Angeles-based Intermix in April after a six month investigation that implicated the firm in infesting millions of home computers with nuisance programs and worse.

According to this complaint, 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. Along with these programs comes invasive ad-ware programs which allegedly get installed without the consent of consumers visiting these sites. Among these malign programs are KeenValue, which serves pop-up ads and IncrediFind, which redirects web addresses to Intermix's proprietary search engine. Other programs placed advertising "toolbars" on users' screens.

Intermix said these accusations relate to historical business practices which it has already dropped. It claims to have further cleaned up its act by creating a position of chief privacy officer and joined industry self-regulation group, the Network Advertising Initiative, since Spitzer's lawsuit was filed in April. Both sides of the argument reckon a final agreement, which needs to be court approved, is two or three weeks away.

News of the tentative settlement agreement came on Tuesday after Intermix posted a Q4 net loss of $409,000 compared with a loss of $4.4m last year, Reuters reports. Intermix shares rose 71 cents, or 12 per cent, on Wednesday morning trading on the American Stock Exchange following news of the settlement and its financial results, AP reports. ®

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