There is growing unease among consumer privacy advocates over Google's proposed $3.1 billion acquisition of DoubleClick.
How will the search-advertising powerhouse treat the massive amounts of data it already stores on people's search histories once it also has at its disposal a storehouse of data on people's surfing habits from DoubleClick, the No. 1 digital ad-serving company? Specifically, will Google combine the two data systems to map not only what someone searches for, but also which sites they visit, videos they watch and ads they click across the Web in order to better target marketers' promotions?
"It leaves too much personal information about all of us in one company's hands--Google's," said Jeff Chester, founder and executive director of the Center for Digital Democracy, a privacy watchdog. The CDD has called on the Federal Trade Commission and European Union to stop the merger for privacy and anti-competitive concerns. On Monday, Microsoft (which reportedly was also in talks to acquire DoubleClick) and AT&T stoked those fears and also asked the FTC to examine the merger for anticompetitive issues around online advertising.
Google says that such fears are unwarranted. (The deal is expected to close later this year.) When asked about such worries Tuesday at the Web 2.0 Expo in San Francisco on Tuesday, Google CEO Eric Schmidt replied that the company recognizes the importance of privacy and making people comfortable with its practices. He speculated that Google could create an opt-in system for consumers, or maintain separate data storehouses.
"It's a legitimate concern. If we lose our advertisers support or end-user support, the company goes kaput," Schmidt said.
Google representatives did not immediately respond to requests for additional comment, but Google's associate general counsel Nicole Wong told The Los Angeles Times that the company hopes to merge the "nonpersonally identifiable data" from Google and DoubleClick to better target ads. She said that could help prevent consumers from being bombarded with repetitive promotions. Personally identifiable data like names and e-mail addresses will be kept apart.
Schmidt and Wong's assurances notwithstanding, privacy advocates worry that Google's vision for protecting users' personal information on the Web, and therefore its privacy policies and practices, haven't yet caught up with the breakneck pace of the company's expansion. That DoubleClick was intensely criticized for the way it handled users' personal information during the dot-com boom.
"This is bringing together two very large advertising networks. To the extent that information is being centralized raises concerns that it could become a target" for hackers or overzealous government investigators, said Kurt Opsahl, senior staff attorney at the Electronic Frontier Foundation, a legal advocacy group. "Google said it has no plans to integrate the two services...but that doesn't mean that later you might not develop those plans."
During the dot-com bubble, DoubleClick was to online advertising what Google is to Web search today. The company dominated the field so much that when it bought offline direct-marketer Abacus and eventually began combining data on customers' real-world buying habits with their online behaviors, consumer advocates sounded warning bells. The FTC stepped in, and DoubleClick eventually back away from the consumer media business and targeting ads based on people's behavior.
Part of DoubleClick's retreat could be attributed to increased competition: Google and Yahoo became advertising powerhouses and made DoubleClick's business not as lucrative as it once was.
The prize: the display ad market
For Google, the DoubleClick deal is about breaking open the display advertising market on the Web in the way it did with search marketing, media executives say. By turning search advertising into an opportunity for anyone with a credit card and Web page, Google has attracted more than a million advertisers for its search ad marketplace, according to one advertising executive.
But display advertising on the Web is still dominated by about 1,000 of the largest marketers. With DoubleClick, Google could try to democratize display and rich media ads the same way as it did with search, expanding the number of advertisers in the mix. In turn, it could boost demand for ad-serving technology that DoubleClick sells.
Media executives estimate that DoubleClick reaches between 80 percent and 85 percent of the Web population, given that such a high percentage of publishers and advertisers use its backend ad-serving technology. (Its customers include AOL and MTV.) Though its technology delivers the ads, DoubleClick does not collect personal information about Web surfers, nor does it target ads based on personal preferences, according to the company. Rather, DoubleClick says that its customers, the publishers and advertisers, own data on consumers.
DoubleClick doesn't need to collect personal information, privacy advocates say. With the placement of tracking cookies on individual computers, the company has access to Internet Protocol address and a record of sites visited associated with that computer in order to target ads.
"The question for DoubleClick is not whether they own the data, but whether they store it," Opsahl said. "They have a storehouse of information that could be later accessed by a third party."
The scary scenario for privacy advocates would be if Google were to combine its own storehouse of data on users--yielded through cookies and other personal information given up for services like Gmail--with DoubleClick's data. It would then have unparalleled visibility into people's behavior online, a point brought home last year when AOL accidentally leaked the search histories of users.
What's more, with Google venturing into ad sales for offline media, including radio, TV and print, the company could eventually have a user profile database that goes well beyond what DoubleClick ever planned. Google, for example, just introduced a free voice-activated local search service for the cell phone and landlines.
"You start to add on more and more collections of information, and they have the ability to tie all of this together and that poses a major potential for privacy risk in the future," said Ari Schwartz, deputy director for the Center for Democracy and Technology, an advocacy group in Washington, D.C.
Source: CNet News