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Adware was originally designed as a software that displays targeted advertising to the user while surfing the internet; however it has been redesigned to be able to keep track of which web sites the user visits, how long they are there, and what type of content they viewed while on that site. The adware then sends this information to the advertiser, who can then create more personalized ads to the user.
Some types of adware can also be attached or embedded in e-mail, and are able to report to the sender when you opened the mail, how long you looked at it, and what you did with the e-mail. Besides being very annoying to have numerous pop-up ads to weed through while surfing the net, this type of data mining can actually tell the advertisers a lot about you.
Adware can also slow the infected computer's performance considerably. The constant pop-up ads take up a lot of RAM and slow performance. Another danger of adware is that it can change your home page without your knowledge or permission.
One of the most common ways that a computer gets infected with adware is by downloading or installing "freeware". This type of software usually has some sort of adware embedded in the program allowing the advertiser pay for the program using advertising instead of charging for the software.
It has become common practice to install an anti-spyware / anti-adware software package on most computers along with the standard anti-virus and firewall software to help remove these unwanted programs and protect you from these dangers.
References:
http://ezin earticles.com/?The-Hidden-Dang ers-of-Adware&id=211079
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