Cashing in on privacy

Screaming privacy headlines and publicity around other cyberethics snafus are spurring new-breed technologies and hammering home the moneymaking aspects of responsible IT.

This week, the industry will see the launch of a start-up's service that company officials claim to be one of the first ever methods for consumers to complete each phase of an ecommerce order entirely anonymously, right up until the product lands on the doorstep.

Meanwhile even wireless vendors are getting into the fray, pitching direct mobile marketing schemes that are predicated on a central privacy pillar: the opt-in policy.

While Washington lawmakers and industry heavyweights continue to wrestle over the need for new laws to mandate privacy practices, newer companies are rushing in with technical solutions billed expressly for their privacy-enhancing capabilities.

"We are starting to see various businesses for which privacy is a core part of their value proposition," said pioneering privacy advocate Jason Catlett, CEO of Junkbusters, in Green Brook, N.J.

For some time corporate America has realized that good privacy practices go beyond philanthropy and are central to good business. But now businesses may be crossing over into a willingness to begin investing in solutions that promote enhanced privacy for their customers and even employees.

A new set of vendors is ready to cash in on that phenomenon. "We don't look at ourselves as solving an online ethics problem. We see this as a big marketing opportunity," said Ruvan Cohen, president of New York-based iPrivacy.

Launching its service officially on Sept. 11, iPrivacy has been stacking up deals with credit card companies and other third parties willing to serve as a privacy shield for consumers transacting on the Web.

iPrivacy bills its service as different from those of emerging online e-commerce infomediaries. "You as a consumer would provide personal and private data, and then [the infomediary] would transact on your behalf. That requires too much change in the way consumers operate," said Sal Stolfo, iPrivacy's chief scientific advisor.

Instead iPrivacy will provide an infrastructure to credit card companies and third parties that would shelter users from disclosing either personal data or clickstream information used to build profiles on consumers.

The credit card company would issue software to its customers that would work in conjunction with a site server that lets the customers access the Web as they normally would without having information about them trickle out in the process. Client-side software would let the credit card company serve as a proxy that would fill out the forms necessary to order, buy, and deliver products.

Other vendors such as Fort Lauderdale, Fla.-based Qode are also billing new online shopping tools as privacy enhancers. Qode is hawking to e-commerce vendors a system that lets shoppers use a bar-code scanner plugged in to a keyboard jack to hunt the Web for items they want to buy.

Qode officials claim that by using the bar-code number as the identifier for the transaction-and by putting online marketing incentives alongside the item rather than in a user's e-mail inbox-privacy is enhanced.

"We wanted to figure out how to do a commerce channel which would not breach privacy, so people would not be hit up to buy everything under the sun because someone knows they buy a particular bar of soap," Qode co-founder Mike Miller said.

Wireless marketing company SkyGo, in San Mateo, Calif., is also using privacy as an eye-catcher for its new wireless marketing drive. In late September, the company will begin testing its new mobile infrastructure that incorporates push and pull advertising.

"The system is completely opt-in. We have strict policies that say a user's data will be used only by us for targeting advertising," SkyGo CEO Daren Tsui said.

Tsui acknowledged that wireless users paying for airtime are extremely sensitive to spam, but he pointed to study findings that show that most consumers are willing to trade some personal data if the incentive is high enough.

Heightened awareness around ecommerce and privacy is also prompting solutions developed for related areas, such as workplace privacy.

For example, iPrivacy executives described a second use for its private e-commerce solution. Businesses can also tap a third party such as a law firm to serve as host to the software, which can be used for a whistle-blowing application. "This would allow a company to identify ethics violations such as sexual harassment and other sensitive grievances" without raising employee privacy concerns, iPrivacy's Cohen said.

In what at first appears to be an ironic twist, Tacit Knowledge Systems, in Palo Alto, Calif., is using privacy concerns as part of its selling point for an enterprise solution that scans employee outbound email to create profiles on individuals' skill sets.

Such profiling will become increasingly important because mere enterprise portals will not be enough to satisfy the exchange of information that businesses will seek both internally and in their interactions with trading partners, officials said. "Relationships and knowledge within an enterprise will be a huge asset," Tacit CEO David Gilmour said.

Because employees balk at e-mail sniffing-although Gilmour claims that courts have routinely ruled on the side of businesses on the issue-enterprise IT officials welcome Tacit's privacy protections.

Specifically, Tacit's technology encrypts personnel profiles until the employee approves their publication.

"We have been focusing on this technology long before it became fashionable," Gilmour said. "We have a business strategy based on the fundamental belief of the dignity of the individual and the value of preserving a person's uniqueness."

Such principles seem basic, but many corporations are struggling to translate them to the online world, said Scott Rechtschaffen, senior vice president of learning and content development for Employment Law Learning Technologies (ELT), in San Francisco.

ELT later this month will roll out a "cyber policy offering"-online tutorials to walk corporations through 12 issues, including privacy and e-mail and Internet usage policies.

As further proof that portions of the tech industry are spending-as some are making money-on these issues, companies such as PricewaterhouseCoopers are seeing their privacy-related consulting business go through the roof, Junkbuster's Catlett reported.

Still, Catlett quipped, "It's a cliché that technology is morally neutral. But there tends to be more opportunities to violate technology than protect it."

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