FREE SPYWARE. The Federal Trade Commission asked a U.S. District Court judge last week to halt operation of a company that installs spyware on consumers' PCs. The twist: The company attracts customers by touting free peer-to-peer file-sharing software. According to the FTC's complaint, Odysseus Marketing and its chief executive, Walter Rines, advertised software called Kazanon--with claims like "Download music without fear," and "Don't let the record companies win"--that lets consumers engage in anonymous peer-to-peer file sharing. When consumers download the software, they get an extra bonus: spyware called Clientman that secretly downloads dozens of other adware programs. The FTC said the Clientman software, among other things, replaces or reformats search-engine results, creating bogus search pages or putting clients' Web sites at the top of legitimate search results. The unwanted software programs also generate pop-up ads and transmit information from consumers' PCs to servers controlled by Odysseus. The FTC said the Clientman software is "difficult to detect and impossible to remove using standard software utilities," and while Odysseus does advise consumers about the spyware, the warning is hidden "in the middle of a two-page end-user licensing agreement buried in the 'Terms and Conditions' section of their Web site." The final irony: The surreptitious peer-to-peer file-sharing software doesn't work.

THE EBAY OF ONLINE GAMBLING. Spending on Internet gaming has grown from $3.1 billion in 2001 to $12 billion in 2005, with predictions of it reaching $24.5 billion by 2010, according to Matchbook, a new online gambling site. Unlike other sites, Matchbook, officially launched last week (it began testing its service in June), acts like a gambling version of eBay, putting together online gamblers who bet with each other rather than with the house. And instead of the 5% to 10% commission charged by most gambling sites, Matchbook says it charges only 2%. Matchbook functions "no different from other electronic exchanges such as the Chicago Mercantile Exchange or Nasdaq," the company said in a statement. Matchbook is looking to grab a piece of what it says is a $100 billion market for sports betting in North America. The status of online gambling in the United States is still somewhat up the air. The World Trade Organization has given the United States until April to clarify its position on Internet gambling, based on a WTO ruling last spring that questioned a U.S. law known as the Interstate Horseracing Act that allows out-of-state betting. U.S. officials maintain that online gambling is illegal.

POKER VS. GOLF. Speaking of gambling, an executive entertainment company is putting together a poker tournament for CEOs in an attempt to cash in on the recent popularity of poker, both as a participatory and a spectator sport. "Poker is definitely the new golf," says Maria Gomez, president of World CEO Entertainment, which develops "entertainment productions that feature CEOs in a variety of out-of-the-box scenarios," according to a statement. Gomez says more than 400 execs already have applied to play in the tournament, which will take place in April. Gomez will announce the venue, "a major hotel in Las Vegas," this week.

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