Adware, often called advertising-supported software by its developers, is software that generates revenue for its developer by automatically generating online advertisements in the user interface of the software or on a screen presented to the user during the installation process. The software may generate two types of revenue: one is for the display of the advertisement and another on a "pay-per-click" basis, if the user clicks on the advertisement. Some advertisements also act as spyware, collecting and reporting data about the user, to be sold or used for targeted advertising or user profiling. The software may implement advertisements in a variety of ways, including a static box display, a banner display, full screen, a video, pop-up ad or in some other form. All forms of advertising carry health, ethical, privacy and security risks for users.
The 2003 Microsoft Encyclopedia of Security and some other sources use the term "adware" differently: "any software that installs itself on your system without your knowledge and displays advertisements when the user browses the Internet", i.e., a form of malware.
Some software developers offer their software free of charge, and rely on revenue from advertising to recoup their expenses and generate income. Some also offer a version of the software at a fee without advertising.