Borrowed from: http://searchsecurity.techtarget.com/definition/spyware
In general, spyware is any technology that aids in gathering information about a person or organization without their knowledge. On the Internet, spyware is programming that is put in someone's computer to secretly gather information about the user and relay it to advertisers or other interested parties. Spyware can get in a computer as a software virus or as the result of installing a new program. Data collecting programs that are installed with the user's knowledge are not, properly speaking, spyware, if the user fully understands what data is being collected and with whom it is being shared.
The cookie is a well-known mechanism for storing information about an Internet user on their own computer. However, the existence of cookies and their use is generally not concealed from users, who can also disallow access to cookie information. Nevertheless, to the extent that a Web site stores information about you in a cookie that you don't know about, the cookie mechanism could be considered a form of spyware. DoubleClick, a leading banner ad serving company, changed its plans to combine cookie information with database information from other sources to target ad campaigns directly to individuals without their permission. DoubleClick's current policy is not to collect "personally-identifiable" information about a user without their explicit permission or "opt-in."
Spyware is part of an overall public concern about privacy on the Internet.