Spyware is computer software that collects personal information about users without their informed consent. The term, coined in 1995 but not widely used for another five years, is often used interchangeably with adware and malware (software designed to infiltrate and damage a computer).
Personal information is secretly recorded with a variety of techniques, including logging keystrokes, recording Internet web browsing history, and scanning documents on the computer's hard disk. Purposes range from overtly criminal (theft of passwords and financial details) to the merely annoying (recording Internet search history for targeted advertising, while consuming computer resources). Spyware may collect different types of information. Some variants attempt to track the websites a user visits and then send this information to an advertising agency. More malicious variants attempt to intercept passwords or credit card numbers as a user enters them into a web form or other applications.
The spread of spyware has led to the development of an entire anti-spyware industry. Its products remove or disable existing spyware on the computers they are installed on and prevent its installation. However, a number of companies have incorporated forms of spyware into their products. These programs are not considered malware, but are still spyware as they watch and observe for advertising purposes. It is debatable whether such 'legitimate' uses of adware/spyware are malware since the user often has no knowledge of these 'legitimate' programs being installed on his/her computer and is generally unaware that these programs are infringing on his/her privacy. In any case, these programs still use the resources of the host computer without permission.
The source, and more information, some of it even being useful and helpful for identifying and/or removing spwayre, found here, at wikipedia:
http://en.wikipedia.org/wiki/Spyware
