Data Mining: DoubleClick's Double Take

By Anita Hamilton

A long-running battle over Internet privacy came to a head last week. It centers on the so-called click streams that websites gather as you move from place to place, information that speaks volumes about your interests and buying habits--and that sites have been selling, without your knowledge, to any e-marketer willing to pay the freight.

Type, say, "Ferrari" into a search engine like Excite or Yahoo, and within seconds an ad for an online car dealer will pop up on your screen. This may not sound terribly sinister, but if your keystrokes are tracked not just within a single website but across thousands of sites, they can create a chillingly detailed profile of behavior you probably think is nobody's business but your own.

That's why privacy advocates are so nervous about DoubleClick. Not only is the New York City-based company the 500-lb. gorilla of online advertising--serving banner ads to 1,800 commercial sites that represent nearly 50% of all Web traffic--but it also has ambitious plans to merge its massive database of consumer surfing habits with off-line data culled from catalog purchases. That would enable it to match what had been anonymous mouse clicks to real names and addresses--shredding whatever thin veil of privacy still hangs over cyberspace.

The plan unleashed a fire storm: six lawsuits; separate investigations by the FTC and the states of New York and Michigan; and a mess of bad press. But it wasn't until the company's stock plunged and two key business partners--Altavista and Kozmo--broke ranks that DoubleClick finally backed down. "I made a mistake," said CEO Kevin O'Connor, whose $1.7 billion purchase last fall of tracking data from Abacus Direct alerted privacy watchdogs that something was afoot.

"This is by no means over," says Marc Rotenberg of the Electronic Privacy Information Center, who helped lead the fight. In fact, DoubleClick has not called off its plans but only shelved them until the government and industry can agree on a set of privacy standards. Surfer, beware.

--By Anita Hamilton