SAN JOSE, Calif. — Google Inc., Yahoo Inc., Facebook Inc. and other Internet companies have made billions of dollars tracking people’s online movements and using that data to target advertising based on their prediction of what a person might buy.
But as privacy concerns grow in Washington and Europe over the voluminous personal data being collected online and through smartphones, a wave of startups hopes to create a new business model for the use of that data. Rather than an Internet where invisible software “cookies” track consumers’ movements online — allowing somebody else to cash in on that data — their alternative model would allow individuals to control their own data, and perhaps even profit by selling access to it.
Some advocates predict the rise of “a privacy and reputation economy,” where a constellation of Internet companies would provide services that allow people to discover what information exists about them online, to counter false information, and even allow people to share personal information with advertisers when it benefits them.
“There will be a very large privacy company, or maybe a few, to help manage these choices for people, because we are creating a ton of data, and that data is not going away, and consumers want to manage it,” said Owen Tripp, co-founder of Redwood City, Calif.-based , which provides customers with a report on their online reputation and offers both free and paid services to shape that digital portrait.
The Internet’s threat to anonymity was highlighted recently with the furor about Facebook’s use of facial-recognition technology for its photo-sharing, and the buzz about the anonymous couple photographed kissing amid Vancouver’s riots after the Stanley Cup finals. The couple’s identities were rapidly flashed across the Web by people who found their social network profiles.
Michael Fertik, Reputation’s chief executive, says concerns about privacy online have created a demand among people to be given control of their data. “We think there is a coming privacy economy,” he said.
That premise is about to be tested. A host of startups from Silicon Valley to Washington, D.C., are rushing to market with an array of online products that let individual users control or manipulate their personal data. Meanwhile, the Personal Data Ecosystem Consortium, a Silicon Valley trade group founded in October, is working to nurture a food chain of Internet businesses that would embrace the premise that individuals should control their own data.
Consider Personal, a startup slated to go live this summer that will offer a service to help people make money from their personal data. Rather than allow an online ad company to track people as they search for digital cameras online, and then serve up camera ads as they visit other websites, Personal would act as a data agent, allowing users, in effect, to hoist a flag saying, “I’m in Peoria; I want a camera that does this, and I’d pay that for it. Show me some ads!”
