At last estimate there were some 200 ad networks in the online display advertising space. Today, there are 199. Jellycloud, the “highly differentiated behavioral ad network,” has finally undergone the ultimate differentiation: It’s shut down. The company–which in past lives was known as Gator and Claria, two names synonymous with spyware–did indeed close last weekend, returning to investors the $11.5 million in venture capital it raised in April, sacking its 36 employees and calling in the asset liquidators.

Oddly, the Jellycloud Web site still sports a “We’re hiring!” message. Perhaps the company’s leadership is already hard at work on its next incarnation. …

Why would anyone agree to such a thing? For their personal enrichment, of course. “I don’t think you can estimate the educational benefit of these things. … A lot of this is basically letting people know that what they’re doing is not OK,” Sherman reasoned. “And for a lot of people that makes a difference in their behavior.”

A bit of stretch, even for Sherman, as Ars Technica aptly notes: “Filtering as a concept is ultimately doomed by encryption unless the ‘filters’ simply block entire protocols altogether, and talking about the consumer benefits of installing RIAA-approved filtering software is just another sign of how ludicrous the entire debate has become.”

The email was sent over a newly made Gmail account, from overseas in a foreign country. Seeing as you’re too stupid to trace the email back lets [sic] get serious,” he taunted in another. “Maybe you should hire Bill Gates to tell you that it is coming from Italy. HAHAHA. Oh wait. I already told you that it’s coming from Italy.”

–Bomb hoaxer Josh Glazebrook

Now that the FBI has made “significant progress in decreasing the rate of loss for … laptops,” it can get on with the much more important business of using them to nab bad guys. Bad guys like former Timberline High School student Josh Glazebrook of Lacey, Wash., who pleaded guilty to emailing bomb threats and other charges after the bureau tracked him down with a piece of spyware called a Computer and Internet Protocol Address Verifier, or CIPAV. A remotely installed application, CIPAV logs a computer’s Internet protocol address, its open TCP and UDP ports, the type and serial number of the operating system it’s running, the registered user of that operating system, and that user’s login name, and then it sends them all along to the government.

Just how the FBI managed to install CIPAV on Glazebrook’s computer is anyone’s guess. Perhaps the bureau convinced security software makers to white-list the application so it could operate undetected. Or perhaps it exploited an unknown vulnerability in Windows. Of those two explanations, it’s the latter that seems most plausible. “It’s quite possible the FBI knows about vulnerabilities that have not been disclosed to the rest of the world,” Roger Thompson, CTO of security vendor Exploit Prevention Labs, told Wired. “If they had discovered one, they would not have disclosed it, and that would be a great way to get stuff on people’s computer. Then I guess they can bug whoever they want.”

Unsettling, isn’t it? The thought of a million machines sitting in homes, schools and businesses around the country just waiting to spew out some nasty piece of malware or the latest “pump and dump” stock scheme. Depressing, too. Said Gadi Evron, who coordinates an international volunteer effort to fight botnets, “The war to make the Internet safe was lost long ago, and we need to figure out what to do now.”