Spyware is the term given to software used to gather information from your computer that can be used by marketing companies. It primarily affects Microsoft operating systems and Internet Explorer. Most spyware tracks your web browser usage, but more malicious forms may also retrieve passwords or other system information which can be used to commit identity theft. The spyware records this information, and transmits it to the creator of the spyware. These programs, in addition to gathering personal information, also reduce computer performance.
Similar to spyware, adware is also covert software that causes advertising to appear while browsing the web, usually in a pop-up window, that is unrelated to the website you are viewing. While generally less malicious than spyware, adware is still a drain on your computer's system resources, and may result in reduced performance.