In 1998, what would become ContentWatch was a subsidiary of iAccess, happily creating custom compact discs for use as marketing tools. Then pornographers came calling, offering a small fortune if the fledgling company would design CDs to lure users to their Web sites.

Had the cyber-smut peddlers not been so aggressive, the idea of ContentWatch - today a leading Internet filtering products company - might never have taken form. Instead, moral outrage, punctuated by irritation over the pornographers' repeated pitches, brought a pivotal detour for the Utah company.

"[We] chose to do more than refuse business with pornographers, but to also assist in leading the charge against unwanted, objectionable Internet content," says Nelson, ContentWatch's vice president for marketing.

"ContentWatch was born [and] a team organized to develop a filter that would block accessibility to unwanted Internet content. ContentProtect premiered in early 2001."

By the end of the same year, the Salt Lake City-based company released ContentAudit, to trace Internet use patterns, and ContentCleanup, a program to find and remove objectionable files from computers.

Today, ContentWatch has grown from now-retired founder CEO Dennis Webb and a few workers to an employer of more than 40. Its products have become increasingly more sophisticated, going beyond simple sex and spam filtering to programs aimed at securing data; guarding against attacks by hackers, spyware, popup ads and viruses, and providing parents and bosses remote abilities to monitor Internet usage.

Privately held ContentWatch, although reticent about detailing finances, hints at millions of dollars flowing through its coffers. The company acknowledges that its revenues grew 70 percent between 2004 and 2005. Sales are expected to top that pace this year, with profitability projected in 2007.

Its products fare well in numerous reviews, compared with such competitors as Websense, Mcafee, SurfControl, Net Nanny and CyberSitter. Disney recently chose the ContentProtect suite for its new Disney Dream Desk computers for children; the popular Internet music and video provider Real Networks offers ContentWatch's filtering technology as an add-on; and ContentWatch products will be an option on the upcoming Windows Vista operating system.

Writing recently for PC Magazine, reviewer Neil Rubenking found the ContentProtect program an effective tool to avoiding the Internet's "dark pools and dangerous eddies. ContentProtect helps you rein in your kids' Internet use and keep them away from its seamy side. Employers can also use it to keep employees focused on work-related sites - and to avoid harassment claims related to porn surfing."

The $35 program - a collection of e-mail and browsing shields and applications for blocking intruders and reporting on Internet use - also won gold medal praise from TopTenReviews.com. The site especially liked ContentProtect's instant e-mail notification of parents when children wander into forbidden cyber-realms.

Dan Pope, weatherman for Salt Lake City television station ABC-4, said he and wife Diane are among ContentWatch's devotees.

"We learned about ContentWatch in late 2005 at a PTA seminar sponsored by the attorney general on Internet safety," Pope says. "I got excited; we were having some challenges with use of the Internet by our kids.

"The remote monitoring feature is a real strong feature for us. I get an e-mail alerting me" if access rules are breached. "I can then take a look, and then take action," he said.

Although ContentWatch has focused on protecting home and family from the exponentially growing realms of pornography and pedophile predators online, the company also is pushing to become the first Internet filtering choice for small to medium-sized businesses.

Jack Sunderlage, the company's president and CEO, says misuse of the Internet in the workplace poses a serious threat to companies' productivity - and increased legal vulnerability.

He said there are plenty of competitors in the field addressing Internet security for "high-end business and enterprise markets. But no one really is addressing the small to medium business market."

At stake, Sunderlage says, is an underserved sector with potential revenues 12 times the size of the home consumer market alone.

With that in mind, ContentWatch last week unveiled its first filtering hardware device - a module that connects physically to a company's network computing system - to augment its corporate software catalog. ContentProtect Pro Server not only blocks pornography and other inappropriate sites, but also allows administrators to define hours when users can access the Internet.

Technology allows employers to do all those things, but should they? Lee Tien, senior staff attorney for the San Francisco-based Electronic Freedom Foundation, says how a company decides such questions can impact staff morale.

"You can argue that they are the employer and you are at work, so they are justified" in computer surveillance, Tien says. "But you have to strike a balance. The workplace has never been just about work.

"You are part of a company, but you may also be a parent who needs to make family arrangements or handle a school emergency. E-mail is a convenient form of communication, and most employers allow you to use it for personal activity."

That said, the foundation readily admits that the employer has legitimate interests in keeping non-work-related Internet usage to a minimum, for both productivity and liability reasons. So Tien suggests computer-use policies be developed with input from management and staff.

Internet filtering programs "are tools, and like any tools they can be used and abused," he says. "The question for employers is to what extent they use these tools."

Sunderlage's vice president of engineering, Kenneth Knapton, emphasized that ContentWatch also protects systems from attacks outside the office, where a prime hazard for unprotected office networks can seem as innocent as a song.

"MP3 [digital music] file sharing . . . opens up a big security hole in a computer network, as well as draining available bandwidth on a company's Internet connection," he says.

Along with such time-wasting, yet otherwise innocuous activities as using company computers to book holiday reservations, shop online, watch sporting events or pursue hobbies, workers viewing or downloading porn rob their employers of time.

How much is lost? International Data Corp. estimates that 30 to 40 percent of Internet use in the office has nothing to do with work. Sex Tracker, a company that both hosts porn sites and monitors their traffic, estimates 70 percent of visits to online smut pages occur during the 9-to-5 work day.

And, consider this: The FBI recently reported that 78 percent of companies say their employees have abused the Web while on the clock. Viruses that piggyback into networks on workers' careless, illicit Internet forays cost the corporate world billions of dollars a year.

The courts have not been kind to business, either, when it comes to employee Internet use leading to sexual or racial harassment complaints.

Late last year, a New Jersey appellate court ruled that employers can be liable for damages to a third-party - say an offended co-worker passing by an X-rated computer screen - if they do not investigate reports of online porn viewing at work.

bmims@sltrib.com