Like the term virus, which is often used as a generic term for all malicious attack software, the term spyware has a similar catch-all usage. It encompasses a family of malware that all has some snoop capability. Let's have a look at the various types.
Spyware: I Spy with My Little App
Spyware includes programs that can record what you do on your computer and share that information with a stranger via an Internet connection. Some can watch and record your web-surfing habits. Some log everything you type. Spyware can also capture user IDs and passwords. It might have the ability to see where you have been on the Web. If there's information on your computer that is of interest to someone and can make them a little money, there's probably a spyware program to capture it.
The motivation to spy this way can be criminal (capturing information for identity theft, perhaps) but most often it's commercial in nature. A company wants to understand you better so it can trigger customized ads or analyze your behavior and sell that marketing data.
Adware: Attack of the Pop-ups
Adware is equally annoying because it not only spies on you, but then it shows you ads. Some adware spies on you because its mission is to show you ads customized to your tastes, usually via pop-up ads on your computer's desktop.
Sometimes adware is a legitimate part of a free program. Software publishers often bundle adware in with free programs they offer, using it as a revenue source. Many warn you of the adware during installation in the End User License Agreement, also referred to as an EULA. (That term always make me think of a slightly portly aunt that you hate to kiss but who makes good cupcakes.)
In a computer, the EULA is that scrollable box of soporific text (which probably earned some lawyer a Jacuzzi) that we all have to agree to before we can install a software package.
The EULA's legalese often says that in return for use of the program for free, you must allow the installation of the adware. See the below screenshot:
Marketing companies that publish and distribute adware often take offense if their products are called spyware. Then again they take offense if you call it anything but install-this-now-because-it's-really-good-ware.
To thwart any potential legal action, computer security companies sometimes call these products potentially unwanted programs or PUPs. Security company McAfeefamous for its antivirus softwarecoined the term.
In any event, it pays to at least skim the EULA before just clicking the Next button. If you see anything suspicious, cancel the installation and do a Google search on the software you're installing. Chances are that if it contains spyware, adware, or any other undesirables, someone will be railing about it on the Internet somewhere.
There is one another type called as Snooper which is rather interesting! Check out What is Snoopware?