The lawsuit against New York-based Direct Revenue seeks a court order enjoining the firm from secretly installing spyware or sending ads through already-installed spyware. The suit also asks the court to force the company to provide an accounting of its revenues and to impose monetary penalties.

'Surreptitiously installed spyware and adware harm consumers and businesses, and my office will continue to prosecute these practices aggressively,' Spitzer said in a statement. 'These applications are deceptive and unfair to consumers, bad for businesses that rely on efficient networks to do their jobs, and bad for online retailers that need consumers to trust and enjoy their online experience. We will continue to side with consumers in their fight for control of their desktops.'

In a statement on its Web site, Direct Revenue rebutted Spitzer's allegations. 'This lawsuit is a baseless attempt ... to rewrite the rules of the adware business," the company said. "It focuses exclusively on the company's past practices -- practices we and other industry leaders changed long ago -- and says not a word about what we're doing today

'Mislabeling our products as 'spyware' does a disservice not only to our company, but also to the public by creating an atmosphere of hysteria, confusion and inaccuracy.'

Direct Revenue, now represented by the Andrew Celli of the New York law firm Emery Celli Brinckerhoff & Abady LLP, said it tried to settle the lawsuit, but Spitzer refused.