What is spyware? Simply, spyware
is software that transmits personally identifiable information from
your computer to some place in the internet without your knowledge.
Spyware is typically not the product you install itself, but small add-ons, that you may or may not disable during install. In most cases, the EULA somewhere has a few lines telling you about privacy matters, but typically most users don't read the complete EULA and never know they have spyware on their system.
Adware is a less threatening sort of program. Adware is similar to spyware, but does not transmit personally identifiable information, or at least the collector promises not to sell it. Instead, aggregated usage information is collected, and sent somewhere on the internet.
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