DoubleClick Cancels Plan to Link Net Users’ Names, Habits

Bowing to mounting pressure from consumers and privacy groups, the Internet’s largest advertising company said Thursday that it has halted plans to link people’s names and addresses to their Web-surfing habits.

The sudden reversal by DoubleClick Inc. settles, for now, a privacy dispute that threatened the anonymity of millions of Internet users and quickly became a public relations disaster for the New York-based company.

Kevin O’Connor, chief executive of DoubleClick, said the company “made a mistake by planning to merge names with anonymous user activity across Web sites.” DoubleClick will scrap those plans “until there is an agreement between government and industry on privacy standards,” he said.

It is unclear when such an agreement might be in place.

DoubleClick’s stock price has dropped sharply in recent weeks, and some of its clients appeared to be distancing themselves from the company since details of its new data-gathering scheme began to emerge last month. Since then, the company has been pilloried by critics and has come under scrutiny by federal regulators.

Analysts said DoubleClick probably decided to change plans because the issue was creating a strain with its clients and also because the company was at least a year away from being able to implement the new program.

Clients “don’t want to be put in a negative light on privacy by being associated with DoubleClick,” said Chris Hansen, an analyst at Banc of America Securities in San Francisco. “DoubleClick is benefiting shareholders by holding off on this until it’s clear what is acceptable.”

Privacy advocates said DoubleClick’s reversal is a major victory for consumers and their ability to surf the Internet in anonymity. DoubleClick has enormous influence over advertising and privacy practices online because it serves ads on, and collects information from, thousands of Web sites.

“It really shows the public’s voice does make a difference,” said Ari Schwartz, a spokesman for the Center for Democracy and Technology in Washington, which organized an online protest of DoubleClick’s plans. “Tying personal information to surfing habits is not acceptable.”

The dispute centered on DoubleClick’s intention to combine anonymous data it collects online with a giant offline database, Abacus Direct, that it purchased last year for about $1 billion.

DoubleClick sought to gather names of Internet users from Web sites participating in a new program, then merge the information with the Abacus database, which has data on more than 80 million households from magazine subscriptions, catalog purchases and other offline sources.

DoubleClick assembles “click-stream” profiles of Internet users surfing habits through so-called cookie files that are placed on user’s computers. These text files essentially brand users’ machines with unique identifiers that DoubleClick can access to determine how many times a certain PC has seen an ad, responded to it or even which Web sites it visits.

For years, DoubleClick has insisted that it gathers such data only anonymously. And company officials say consumers can opt out of such data gathering by visiting the DoubleClick Web site and filling out an online form.

Nevertheless, when DoubleClick recently acknowledged that it planned to link previously anonymous data to the names and addresses in its Abacus database, privacy advocates were alarmed.

The Electronic Privacy Information Center filed a complaint with the Federal Trade Commission, accusing DoubleClick of deceptive marketing practices. The Center for Democracy and Technology launched an online protest, prompting thousands of consumers to e-mail complaints to DoubleClick.