ISPs Distance Themselves From Web-Tracking Ad Firms
Each of the telephone and cable companies that had been working with NebuAd Inc., a Silicon Valley startup that was tracking subscribers’ personal Web surfing habits, have indefinitely suspended expansion plans.
The move is most likely the result of Congress’ current consideration to take action and tighten federal oversight. Each of NebuAd’s potential partners, the Internet service providers, failed to make the case that they should be in the ad business at all, rather than simply being the pipes that pass Internet traffic back and forth.
“A bunch of them have dropped (NebuAd) like hot potatoes,” said Gigi Sohn, president of the advocacy group Public Knowledge.
Annmarie Sartor, a spokeswoman for broadband provider CenturyTel Inc., said the company was ready to proceed until “Congress started questioning privacy.”
“We were going to launch this summer,” she said. “The trial from our viewpoint was successful.”
Although NebuAd claimed late last year that Internet providers representing millions of customers run NebuAd’s system, it’s unclear how many, if any, partners remain.
Across the Atlantic, a similar company called Phorm Inc. has also faced complaints since its February announcement of partnerships with three access providers reaching 70 percent of Britain’s broadband market – BT Group PLC, Virgin Media Inc. and Carphone Warehouse Group PLC’s TalkTalk.
Shares in Phorm have declined about 75 percent since peaking 11 days after the announcement.
Both systems work to capture pieces of information based on a user’s Web surfing habits. This information is then used to deliver tailor-made advertisements to the consumer based on their likes or dislikes.
The thinking is that Internet users are more likely to pay attention and find advertising less annoying if the pitches are relevant to them.
For Internet service providers, the rise of NebuAd or Phorm means they could share in ad revenue now going mostly to the networks of Web sites affiliated with Google Inc., Yahoo Inc., Microsoft Corp. and Time Warner Inc.’s AOL.
“Naturally if there is a way to take a meager slice of that revenue in some way, it’s something which companies will want to look at,” said Adam Liversage, a spokesman for BT Group, which plans to start trials “pretty soon” with Phorm.
Complaints about NebuAd largely failed to gain traction until Charter, the nation’s fourth-largest cable access provider, began notifying customers of its planned trial. A House subcommittee took notice and held a hearing in mid-July, following a similar one in the Senate.
NebuAd said late last year that some of the largest service providers were at least testing the service, though it identified only CenturyTel. Then this June, CenturyTel stopped its tests on about 20,000 customers, mostly in Kalispell, Mont., and surrounding areas.
In recent letters sent to Congress, the nation’s largest service providers all said they have not participated. United Online Inc. said it considered doing so, but ultimately decided against it. Smaller phone and cable companies that have conducted trials with hundreds of thousands of customers said they have ended them.
“There will be a long time to go before anyone is making any decisions with any finality,” said Shawn Beqaj, a spokesman for Bresnan, which tested NebuAd in Billings, Mont. That stance is wise, Beqaj said, “whenever the congressional committee with the regulatory authority over your industry expresses concerns with your technology.”
—
On the Net: