A Servant of Two Masters
By Paul Higgitt, Tue Jul 11 00:00:00 GMT 2000

(July 17, 2000) The Internet, Mobility and Privacy

If there is one thing that the Web does better than anything else it is the ability to provide personalized services on a massive scale. A personal information "butler" if you will. Companies that have best harnessed the value-creating possibilities of this new medium have mastered the ability to give us the information we want, they way we want it, in order to help us manage our lives. In a wireless world, devices will not only know who you are when you log on but also where you are, and they will be able to intelligently send you services and information tailored specifically to your needs. Portability will bring new levels of convenience and experience to enrich our lives.

These Information Concierge Services currently take many forms. Today, personal "shop bots" cruise the Web looking for deals, customized intelligent agents deliver to our email boxes the day's news reports from around the world on whatever subject we may chose, and specialty search engines respond to even our most capricious demands for information with a characterless efficiency. Some services, like Ask Jeeves (www.askjeeves.com), even try to give their service a "human" personality, but the bottom line is that these services are in their infancy. In the very near future, systems will be able to make intelligent assumptions about our needs based on our locations or our profiles, sometimes before we even realize those needs exist. Pretty cool, no?


All this "customization" comes at a price. In order for these "bots" to give us what we want they have to possess information about our wants and needs, our preferences and, yes, even our weaknesses. After all, the Internet, if it is anything, is nothing more than a vast database overlaid by an even bigger new communication medium. Bringing the Internet to the mobile devics willl increases this complexity - and the need for smart services - many times over. But that may be more information than many would feel comfortable disclosing. In an era where companies routinely (and often illegally) discharge employees with chronic medical conditions in order to avoid catastrophic healthcare costs, having your heart condition documented with questionable security for all time by an Internet concierge may seem like a high price to pay for the convenience of getting your medication delivered to your home. The problem of privacy will be even more compelling in a wireless world, where the demands of portability and the need to tailor information to your immediate environment reduces concerns of privacy to a footnote.

This is nothing new. Data collection is an old business. Although we daily trade the need for service for the need for privacy every time we use our credit card, it is, by Internet standards, a relatively infrequent occurrence. On the Internet, however, every move you make is tracked by someone somewhere and the data is being collected to help "improve" your "user experience". And like info junkies that we are, we readily give up our anonymity for the sake of the next digital "fix". In spite of valiant efforts by the EEC Parliament to create some measures of protection, large Internet companies, emboldened the public's apparent lack of concern for protecting its own personal data, have been pushing the moral boundaries on what is considered acceptable invasion of privacy.

Earlier this year, Doubleclick (one of the Internet's leading providers of Advertising and Marketing Services) was placed under investigation by the US Justice Department for violation of privacy standards on the Internet. Most sites collect information about users in the aggregate...i.e. user information cannot be traced back to an individual user. Doubleclick however, by merging with Abacus Direct, a traditional offline direct marketing company, enabled itself to determine the online identity of a user by cross-referencing data (such as postal address, name and catalogue purchasing history) from its off line sales databases from the acquired company with information gleaned from the same individual's websurfing activity (e.g. sites visited, IP address, browser version and configuration, and even bookmarks). The surveillance circle was now complete and personal data was ripe for the picking. So complacent had this Internet industry leader become about the issue of privacy, that Doubleclick had made no secret of its plans to use the offline data when it announced the acquisition and expressed considerable surprise when the legal hammer fell.

But DoubleClick is not alone. Many of the big players have been equally eager to betray customer trust in the interests of targeted marketing. RealNetwork's RealJukebox software plug-in was found to be surreptitiously collecting data about user' listening habits and passing the information back to the parent company. Amazon is currently under investigation by the Federal Trade Commission for secretly collecting visitor's personal data through its Alexa subsidiary in violation of its stated policy only to collect anonymous data. Yahoo! may be sued for allegedly collecting personal health data that users were entering on their site. And even Microsoft was caught collecting and secretly transmitting user information through its Windows 98 registration Wizard.

So what does this say about The New Economy?
Companies today are, to a greater and great extent, being valued according to their ability to own, manage, and manipulate customer data. In the Internet Economy, an individual's life becomes the ultimate digital commodity. Every aspect of one's existence, every nuance of every individual human need becomes the real currency of the New Digital Age. Share of customer rather than share of market becomes the ultimate goal of any marketing-driven business. In a world of ultimate information access and unlimited customization, everything you do becomes an immediate potential commercial opportunity for somebody else. As one writer put it "The commodification of goods and services has become secondary to the commodification of human time." Yet the real value-based currency of today's economy is the underlying customer relationships themselves. The old notion of Goodwill -- the simple likelihood that a customer will return based on the quality of the prior experience with a single commercial entity - hasn't much changed. What is new is the unerring efficiency by which the New Economy enables corporations to establish long-term relationships with its customers within an ever-increasing array of interconnected networks.

So what does this tell us about Privacy?
It may come as a surprise to many that, historically, humans have not had much privacy, and that for the last 80 years we have been living in an unparalleled Golden Age of Privacy. Cramped, poorly heated dwellings and the need for humans to collect in tight groups for protection and for mutual sustenance have, for millenia, ensured close living quarters - and thus little privacy - for most in society. The need for servants to perform domestic chores meant that even the wealthy had little or no real expectation of privacy in their daily lives. With the coming of the 20th century improvements in domestic amenities meant we could all expect to live, for the first time, secure in the knowledge that our private lives could be kept behind neatly cropped hedges at least a lawn's length away from prying eyes. For the first time in history we were able to protect data about ourselves because we no longer needed to be physically close to others in order to survive.

Computers, the Internet and searchable databases have changed all that. In a wireless world, the balm of immediate gratification and customized digital convenience will slowly and imperceptibly anaesthetize us to the fact we are losing any right we may have to maintain the kind of private existence we know it today.

At present we are in a period of transition between that Golden Era of Privacy and a New Digital World where we trade personal data for convenience but feel strongly about the need for protection. The question of who actually owns all this data about each and every one of us is by no means clear. The legalities and the morality of whether any third party can actually own another person's identity is up for grabs. The very fact that such a notion is even an issue may shock many.

But the fact remains, the Internet is a servant of two masters. And like any servant with conflicted loyalties, the ultimate success of any such service will be determined by its ability to manage its responsibilities to both.

Paul Higgitt is president of EBIZ , an Internet and ecommerce accelerator.