The vast majority of computer surveillance involves the monitoring of data and traffic on the Internet. In the United States for example, under the Communications Assistance For Law Enforcement Act, all phone calls and broadband internet traffic (emails, web traffic, instant messaging, etc.) are required to be available for unimpeded real-time monitoring by Federal law enforcement agencies.

Packet capture (also sometimes referred to as “packet sniffing”) is the monitoring of data traffic on a computer network. Computers communicate over the Internet by breaking up messages (emails, images, videos, web pages, files, etc.) into small chunks called "packets", which are routed through a network of computers, until they reach their destination, where they are assembled back into a complete "message" again. Packet Capture Appliance intercepts these packets as they are travelling through the network, in order to examine their contents using other programs. A packet capture is an information gathering tool, but not an analysis tool. That is it gathers "messages" but it does not analyze them and figure out what they mean. Other programs are needed to perform traffic analysis and sift through intercepted data looking for important/useful information. Under the Communications Assistance For Law Enforcement Act all U.S. telecommunications providers are required to install packet sniffing technology to allow Federal law enforcement and intelligence agencies to intercept all of their customers' broadband Internet traffic.

There is far too much data gathered by these packet sniffers for human investigators to manually search through all of it. So automated Internet surveillance computers sift through the vast amount of intercepted Internet traffic, and filter out and report to human investigators those bits of information which are "interesting"—such as the use of certain words or phrases, visiting certain types of web sites, or communicating via email or chat with a certain individual or group. Billions of dollars per year are spent, by agencies such as the Information Awareness Office, NSA, and the FBI, to develop, purchase, implement, and operate systems which intercept and analyze all of this data, and extract only the information which is useful to law enforcement and intelligence agencies.


Corporate surveillance

Corporate surveillance of computer activity is very common. The data collected is most often used for marketing purposes or sold to other corporations, but is also regularly shared with government agencies. It can be used as a form of business intelligence, which enables the corporation to better tailor their products and/or services to be desirable by their customers. Or the data can be sold to other corporations, so that they can use it for the aforementioned purpose. Or it can be used for direct marketing purposes, such as targeted advertisements, where ads are targeted to the user of the search engine by analyzing their search history and emails (if they use free webmail services), which is kept in a database.

For instance, Google, the world's most popular search engine, stores identifying information for each web search. An IP address and the search phrase used are stored in a database for up to  months. Google also scans the content of emails of users of its Gmail webmail service, in order to create targeted advertising based on what people are talking about in their personal email correspondences. Google is, by far, the largest Internet advertising agency—millions of sites place Google's advertising banners and links on their websites, in order to earn money from visitors who click on the ads. Each page containing Google advertisements adds, reads, and modifies "cookies" on each visitor's computer. These cookies track the user across all of these sites, and gather information about their web surfing habits, keeping track of which sites they visit, and what they do when they are on these sites. This information, along with the information from their email accounts, and search engine histories, is stored by Google to use to build a profile of the user to deliver better-targeted advertising.

The United States government often gains access to these databases, either by producing a warrant for it, or by simply asking. The Department of Homeland Security has openly stated that it uses data collected from consumer credit and direct marketing agencies for augmenting the profiles of individuals that it is monitoring.

Malicious software

In addition to monitoring information sent over a computer network, there is also a way to examine data stored on a computer's hard drive, and to monitor the activities of a person using the computer. A surveillance program installed on a computer can search the contents of the hard drive for suspicious data, can monitor computer use, collect passwords, and/or report back activities in real-time to its operator through the Internet connection.

There are multiple ways of installing such software. The most common is remote installation, using a backdoor created by a computer virus or trojan. This tactic has the advantage of potentially subjecting multiple computers to surveillance. Viruses often spread to thousands or millions of computers, and leave "backdoors" which are accessible over a network connection, and enable an intruder to remotely install software and execute commands. These viruses and trojans are sometimes developed by government agencies, such as CIPAV and Magic Lantern. More often, however, viruses created by other people or spyware installed by marketing agencies can be used to gain access through the security breaches that they create.

Another method is "cracking" into the computer to gain access over a network. An attacker can then install surveillance software remotely. Servers and computers with permanent broadband connections are most vulnerable to this type of attack.
One can also physically place surveillance software on a computer by gaining entry to the place where the computer is stored and install it from a compact disc, floppy disk, or thumbdrive. This method shares a disadvantage with hardware devices in that it requires physical access to the computer.

Social network analysis

One common form of surveillance is to create maps of social networks based on data from social networking sites as well as from traffic analysis information from phone call records such as those in the NSA call database, and internet traffic data gathered under CALEA. These social network "maps" are then data mined to extract useful information such as personal interests, friendships & affiliations, wants, beliefs, thoughts, and activities.

Many U.S. government agencies such as the Defense Advanced Research Projects Agency (DARPA), the National Security Agency (NSA), and the Department of Homeland Security (DHS) are currently investing heavily in research involving social network analysis. The intelligence community believes that the biggest threat to the U.S. comes from decentralized, leaderless, geographically dispersed groups. These types of threats are most easily countered by finding important nodes in the network, and removing them. To do this requires a detailed map of the network.
Jason Ethier of Northeastern University, in his study of modern social network analysis, said the following of the Scalable Social Network Analysis Program developed by the Information Awareness Office:

The purpose of the SSNA algorithms program is to extend techniques of social network analysis to assist with distinguishing potential terrorist cells from legitimate groups of people ... In order to be successful SSNA will require information on the social interactions of the majority of people around the globe. Since the Defense Department cannot easily distinguish between peaceful citizens and terrorists, it will be necessary for them to gather data on innocent civilians as well as on potential terrorists.

Monitoring from a distance

It has been shown that it is possible to monitor computers from a distance, with only commercially available equipment, by detecting the radiation emitted by the CRT monitor. This form of computer surveillance, known as TEMPEST, involves reading electromagnetic emanations from computing devices in order to extract data from them at distances of hundreds of meters.

IBM researchers have also found that, for most computer keyboards, each key emits a slightly different noise when pressed. The differences are individually identifiable under some conditions, and so it's possible to log key strokes without actually requiring logging software to run on the associated computer.

And it has also been shown, by Adi Shamir et al., that even the high frequency noise emitted by a CPU includes information about the instructions being executed.