Internet snoop Adzilla vacates the American market

US Congressional hearings are one sign. But in another sign that North Americans are getting fed up with Web snooping, Adzilla has shut down its American operations and headed for the less privacy-focused environment of Asia.

In response to a Congressional crackdown on Charter Communications and its Web tracking partner NebuAd, fellow Internet privacy snoop Adzilla is abandoning its North American operations and packing its bags for the Asia-Pacific.

In the heat of federal legislative hearings on privacy rights issues, NebuAd said last week that it was rethinking its business, which had revolved around collecting information for Charter -- the fourth largest cable provider in the US -- and other ISPs about their subscribers' whereabouts and activities on the Web.

According to reports published this week, Adzilla, another specialist in Internet snooping technology, will now head toward the greener pastures of Asia, where prevailing ideas about privacy are different from those in the US.

Spurred by public outrage, Congressional inquiries into Web tracking activities got sparked in May, when two founding members of the US Congressional Privacy Caucus asked Charter -- a company co-owned by Paul Allen, who previously co-founded Microsoft -- to hold off on testing a new "enhanced Internet service" that would have collected private user data for targeted advertising.

That month, Reps. Edward Markey (D - Mass.) and Joe Barton (R - Texas), senior members of the US House Energy and Commerce Committee, sent a letter asking Charter to postpone a planned service based on NebuAd's technology "until we have the opportunity to discuss with you the issues raised by this proposed venture."

One issue bandied about in the Congressional scrutiny has revolved around "opting in" vs. "opting out" of Internet services that track your Web behavior.

"Simply providing a chance for users to opt out of the program is not the same as asking users to affirmatively agree to participate in the program," Rep. Markey contended in a statement.

However, some argue that it's hard to find incentives strong enough to lure Americans into voluntarily allow tracking on their Web browsing activities.

During the recent Olympic games in Beijing, for example, many Americans were shocked by reports that the Chinese government was monitoring the Internet activity of hotel guests and blocking access by foreign journalists to some Web sites.

In a letter to its subscribers, Charter had maintained that its now aborted program would deliver ads through NebuAd producing "an enhanced online experience that is more customized to you and your activities."

Another incentive sometimes tried by marketers involves promising special discounts on products to those who agree to compromise their Internet privacy rights.

Vancouver, Canada-based Adzilla received $10 million in first-round funding last year, after being acquired by Conducive, another Web technology company, in 2006.

NebuAd, the main catalyst for the US Congressional scrutiny, also announced in September that its chief executive, Bob Dykes, had resigned from the company, to take a job with electronic payment solutions company Verifone Holdings as senior VP and CFO.

Charter had planned to test the proposed service from NebuAd in the communities of Oxford, MA; Fort Worth, TX; San Luis Obispo, CA; and Newtown, CT.

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