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Spitzer Spares Spyware Firm Long Trial
Intermix Settles with NY Attorney General for $7.5 Million

Intermix Media, Inc. reported today that it has reached an agreement in principle with the Internet Bureau of the Office of the New York State Attorney General which is expected to resolve the pending lawsuit related to the Company's historical distribution of certain downloadable software applications.

Under the terms of the settlement in principle, the Company would pay a total of $7.5 million over three years to the State of New York, and would permanently discontinue distribution of its adware, redirect and toolbar programs, all of which Intermix has previously and voluntarily ceased distributing. Intermix emphasized that it has not admitted any wrongdoing or liability and expects the final agreement to reflect this fact.

Eliot Spitzer, who heads the Attorney General's office in New York, has built a recent reputation as a hard-driving, high-profile prosecutor who goes after companies and individuals aggressively when he thinks they have wronged his states' citizens.


Eliot Spitzer

"We are pleased to announce an agreement in principle that should allow for an amicable resolution of this matter," said Richard Rosenblatt, chief executive officer of Intermix. "Our mandate was to remove this obstacle to the Company's continued upward trend and to place this legacy business and related issues behind us."

Since the initial inquiry by the Attorney General's Office, Intermix has:

  • Created the position of Chief Privacy Officer and is recruiting and evaluating final candidates; and
  • Joined the Network Advertising Initiative (NAI), which has worked with the Federal Trade Commission and U.S. Department of Commerce to develop a self-regulatory regime to protect the Internet consumer and, simultaneously, the viability of Internet technology.

"Persistent consumer concerns about online marketing require constant vigilance in today's internet marketplace," said Trevor Hughes, executive director of the NAI. "We look forward to Intermix's participation in the NAI as we continue to forge industry best practices that preserve online advertising while respecting consumers."

"As a leader in new media, we are dedicated to cultivating a reputation for forging best practices in an industry where standards evolve and change rapidly," said Rosenblatt. The company bills itself as providing "sites and solutions that engage." Its domains include grab.com and flowgo.com.

Spitzer's office has not confirmed that this is a done deal, and Intermix has posted the following statement: "Final resolution of the New York Attorney General lawsuit is subject to agreement by the parties on the specific provisions of, and the Court's issuance of, a Stipulated Consent Decree memorializing the terms of the settlement. The Company expects formal resolution of the matter to occur within the next few weeks, although no assurance can be given that agreement on the specific terms of a Stipulated Consent Decree will be achieved or that any other requirements for final resolution of the matter will be satisfied."

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