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Bluejacking is the sending of unsolicited messages over Bluetooth to Bluetooth-enabled devices such as mobile phones, PDAs or laptop computers. Bluetooth has a very limited range, usually around 10 meters on cellular phones, but laptops can reach up to 100 meters with powerful transmitters.
The name originated with a user named ajack on esato.com. Jack was in a bank, searching for other BT enabled devices. When he found a Nokia 7650, he sent the owner a message saying "Buy Ericsson". He called it bluejacking, and it stuck ever since.
Some people think that the term bluejacking comes from Bluetooth and hijacking. While that certainly sounds logical, a bluejacker doesn't hijack anything: he merely uses a feature on his and the recipient's device. Both parties remain in absolute control over their devices, and a bluejacker will not be able to take over your phone or steal your personal information.
Bluejacking is quite harmless, but because bluejacked people don't know what is happening, they think their phone caught a virus or it is in serious need of an exorcist. Usually, a bluejacker will only send a text message, but with modern phones it's possible to send images or sounds as well.