Intermix Media Inc. announced Tuesday it has agreed to pay $7.5 million to the State of New York to settle a lawsuit brought by Attorney General Eliot Spitzer accusing the company of peddling spyware.


The Calabasas-based Internet advertising and social networking company admitted no wrongdoing, but agreed to permanently end distribution of its adware, redirect and toolbar programs, controversial applications that imbed themselves in users' computers sometimes without their knowledge.


Intermix had already stopped distributing the programs in April. Some of the applications in question were leftover from the company's prior incarnation as eUniverse Inc., a company de-listed from the Nasdaq in 2003 due to faulty accounting.


"As previously indicated by the company, distribution of downloadable applications has not been central to current management's vision for the future of Intermix and was not material to the company's 2006 forecasts," the company said in a press release.


Also Tuesday, Intermix reported a net loss of $409,000 (1 cent per diluted share) for the fourth quarter ended March 31, compared with a loss of $4.4 million (16 cents) for the like period a year earlier. Revenue rose to $24.1 million from $14.4 million in the year-ago period.


Fourth-quarter net income reflects a gain of $6.3 million related to the MySpace, Inc. transaction completed in February and a $6.9 million reserve established to resolve the Spitzer litigation.


For the full year, the company expects revenues to $118 million, an increase from previous guidance of between $112 million to $115 million, and net income of approximately $8.2 million. For the first quarter, Intermix anticipates revenues of between $25 million and $26 million, and net income to be breakeven.


The stock has taken a beating since the company first disclosed Spitzer's investigation of its practices, falling more than 50 percent since March. On Tuesday, it settled down 16 cents at $6.10.

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