Cybersecurity business Avast said today it would shut down its controversial Jumpshot business after media reports revealed it was selling data on its users to clients.
Avast said it would terminate the provision of data to Jumpshot “with immediate effect” with more than 200 jobs in the business at risk.
Speaking to City A.M. chief executive Ondrej Vlcek said: “I am not trying to defend Jumpshot, with hindsight it’s easier to judge it. In the grand scheme of things it was a venture we probably shouldn’t have entered into.”
Shares fell 13 per cent to 395p today, having closed on Friday at 551p.
Vlcek, who was appointed chief executive of Avast in July, said the decision to close Jumpshot had been taken before this week, but would not confirm when it was made.
“The media storm started on Monday and we announced [the closure] Thursday morning. This decision realistically could not be taken in three days,” he said.
Vlcek said he was not aware of whether Avast had been in contact with the Information Commissioner’s Office (ICO) or other data watchdogs over the last week in relation to any possible data breach.
Vlcek put costs at winding the business down at $15m-$25m (£11.5m-£19m) and also said it was buying out minority shareholder Ascential which paid $61m for its 35 per cent stake in the business in July.
Jumpshot had revenue of $36m last year.
Vlcek apologised to the company’s customers and said: “In 2015 this sounded like a good idea, in 2020 this does not sound like a good idea.”
The company said that while it believed it had not breached privacy regulations, it was closing the division to “mitigate any perceived conflict of interest with our core security mission that might exist with our users”.
In a blogpost today, Vlcek said: “While the decision we have made will regrettably impact hundreds of loyal Jumpshot employees and dozens of its customers, it is absolutely the right thing to do.”
Jumpshot was started in 2015, “during a period where it was becoming increasingly apparent that cybersecurity was going to be a big data game,” Vlcek said.
Vlcek said the decision to close the business had been taken because “people have become increasingly sensitive to data privacy matters”.
Avast said today that its results for the year to 31 December were likely to be in line with expectations.
Looking forward the company said adjusted earnings would be broadly flat in 2020 but predicted “healthy growth” in revenue.