Handy Software Lab Products Knowledge Base

Spyware is something of a grey area, so there's no copy-book definition for it. However, as the name suggests, it?s often loosely defined as software that is designed to gather data from a computer and forward it to a third party without the consent or knowledge of the computer's owner. This includes monitoring key strokes, collecting confidential information (passwords, credit card numbers, PIN numbers, etc.), harvesting e-mail addresses or tracking browsing habits. There?s a further by-product, of course: such activities inevitably affect network performance, slowing down the system and thereby affecting the whole business process.

The reason spyware is such a grey area is that it's really just a catch-all term for a wide assortment of malware-related programs, rather than a defined category. Most spyware definitions apply not only to adware, pornware and riskware programs, but also to many Trojan programs: Backdoor Trojans, Trojan Proxies and PSW Trojans. Such programs have been around for almost 10 years, when the first AOL password stealers appeared. However, they were not then called spyware.

Although such programs are not new, their use for malicious purposes has increased in recent years and they have received much greater attention, both from the media and from spyware-only vendors.

The ASC [Anti-Spyware Coalition] drafted a definition of spyware in August 2005. The ASC defines spyware and other potentially unwanted technologies as those that

• impair users' control over material changes that affect their user experience, privacy, or system security;
• use of their system resources, including what programs are installed on their computers;
  
• or collection, use, and distribution of their personal or otherwise sensitive information.

This definition, like others, spans the whole range of maware-related programs.

Source: http://www.viruslist.com/en/glossary