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  • Time to Let the Cookies Crumble?

    By Leslie Walker
    Washington Post Staff Writer
    Thursday, November 4, 1999; Page E01

    I am contemplating drastic action. I may open the "cookie" jar inside my computer, dump all my data crumbs into the recycle bin and start over. Bye-bye to more than a year's worth of stored personal preferences at dozens of Web sites.

    Why do this? After all, it will only force me to go to each Web site and re-create my registration data, which is stored in small text files called cookies on my computer's hard drive. Some Web sites also put cookies on my computer without my knowledge so they can recognize me and personalize the pages and advertisements I see.

    I'm uneasy because this personal profiling is moving to a new, dizzying level, thanks to more sophisticated surveillance technologies being rolled out by giant advertising networks.

    In a consolidation frenzy since summer, Web ad networks have been acquiring new expertise and are collecting more data across a greater number of Web sites.

    Until now, most of the networks that deliver banner ads to thousands of Web sites have built profiles of how people respond to those ads without collecting information that could identify individuals. For the first time, though, ad network DoubleClick Inc. plans to cross-link its millions of anonymous Web profiles with a database containing off-line purchasing histories on 88 million identifiable American households.

    When that happens, I want a clean slate. I do not want all my gag gift, liquor and travel purchases off-line linked to any record of Web sites I visit.

    The Web ad networks say their goal is simply to show me banner ads I will click on more often because they will be more relevant to my interests, thereby making advertising more efficient and allowing Web sites to charge higher ad rates.

    This quest to personalize online advertising runs a number of risks, though. First, it might not work, which would be bad news for Web sites hoping to repay investors by collecting more ad revenue. And even if it does work, it might strip consumers of so much privacy that the extra relevance in marketing pitches might not be worth the social and psychological price.

    Either way, the trade-off between personal privacy and personal commerce is rapidly becoming one of the defining business battles of the Internet.

    All parties are gathering in Washington on Monday for a Federal Trade Commission hearing on personal profiles and how they are used to target online ads. "We want to know to what extent this technology has the potential to decrease consumer confidence in electronic commerce, and if so, what steps could be taken to minimize that," said David Medine, one of the FTC officials conducting the hearing.

    Nowhere is the struggle more apparent than in the intensifying competition between ad networks. In recent months, two publicly traded Internet companies--DoubleClick Inc. and CMGI Inc.--together have spent roughly $3 billion to buy or merge with other companies that have ad-targeting expertise.

    CMGI owns up-and-comer Engage Technologies Inc., which has compiled 35 million Web surfing profiles tied to specific people but without any names. Each profile contains data in up to 800 different categories. Engage is just beginning to use its profiles to deliver targeted ads across thousands of participating Web sites. Engage's new system lets an advertiser match ads with individuals based on their past surfing history--not just the page they are currently viewing.

    What's new is that if Reebok wants to flog a special running shoe only to men over 40 who run marathons and live in Virginia, Engage claims it can now do so. Not only does it build more specific profiles (still without names, addresses, or other identifiable information), it claims it can instantly deliver an ad to Mr.-Over-40-Marathon-Man the minute he drops by 800flowers to order a Mother's Day bouquet.

    More worrisome to privacy advocates are recent moves by industry leader DoubleClick, which completed its merger this week with competitor NetGravity and within a month hopes to close its purchase of Abacus Direct. Abacus takes names--lots of them. It has pooled data on more than 2 billion catalogue transactions provided by 1,485 different merchants. Abacus also has an e-mail database, and DoubleClick is building one too.

    DoubleClick officials make no bones about their intention to selectively cross-link--with consumers' permission, they say--some of their anonymous Web behavioral profiles with transaction data from Abacus.

    But in a bow to privacy concerns, DoubleClick senior vice president Jonathan Shapiro said, "We have already made decisions about certain classes of information that we are not going to use in our profiling and targeting efforts." Off-limits, he said, will be information about children's activities, detailed financial activities and health and medical records.

    Also new this month is an experimental ad-targeting service from MatchLogic, the ad network owned by Excite At Home that has compiled 62 million anonymous personal profiles and 10 million others with identifying information. The service will allow advertisers to automatically change images, text or other elements inside a particular ad based on a viewer's profile.

    Privacy advocates worry that consumers are being asked to place too much trust in companies that are among the Internet's biggest businesses. They acknowledge that online data analysis remains crude--far less is known today about most consumers' Web behavior, for example, than the typical credit card company already knows. But the potential for wider cross-referencing looms. Online databases can log not only how much money we spend at a store, but also how long we linger looking at each item and what comments we make in chat rooms along the way.

    "On the Internet now it's like you're walking around with your passport stuck to your forehead or your address printed on your T-shirt," said Austin Hill, founder of Zero-Knowledge Systems, a Montreal company developing software to help consumers create online pseudonyms. "We need a structure on the Internet that doesn't compromise your identity."

    Zero-Knowledge is one of many companies that are crafting new tools in an attempt to give consumers greater control over what information they release to Web sites--while still letting Web sites and ad networks track their behavior.

    Until those tools get a little sharper, I'll be cleaning my cookie jar a lot more often.


    © 1999 The Washington Post Company

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