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Spyware is the general term for a program that monitors and makes records of your actions with the scope of future advertisement targeting or even private information harvesting, leading to possible sensitive data loss. Many popular file-sharing programs come bundled with spyware. In fact, spyware is embedded in hundreds of programs -- including games, utilities, and media players - that can be downloaded for free from the Internet. Spyware is also how many file-sharing vendors make money while not charging for their products. With these programs, it has been said, you pay with your privacy instead of with money.

While you are surfing the internet and conducting several activities such as monetary transactions, account registering and other miscellaneous day to day online activities, spyware variants monitor everything and create logs that are later sent to third parties. This information is then automatically processed and used to make you a target for specific advertisements, spam, porn content and many other illegal/immoral issues.
Because the threats posed by these programs may be difficult to quantify, that doesn't mean they aren't a security concern to today's enterprises. Because spyware and adware programs are unauthorized software, average administrators have no knowledge of or control over what the programs may be running. A good comparison would be a vendor knocking at your door and offering you some extremely cheap and legal product while a thief comes inside your house through the open back door.
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