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DoubleClick climbs after privacy probe ends

Shares of the online advertising network gain 14 percent after the Federal Trade Commission finishes its investigation of the company's data-collection practices.

DoubleClick shares gained 14 percent Tuesday after the Federal Trade Commission finished its investigation of the company's data-collection practices.

As previously reported, the agency concluded that the online advertising network had not used sensitive information in violation of its privacy policy through its collection of online consumer habits, or "clickstream data."

"The issue that triggered the investigation was a report that (DoubleClick executives) were planning to combine offline information from (subsidiary Abacus Direct) with their clickstream data. However, this never took place," FTC spokesman Eric London said Monday. "As a result, there was no violation of their privacy policy."

DoubleClick rose $2.06 at $17.31 by the 1 p.m. PST close of regular trading Tuesday. It hit a high of $17.50 earlier in the day.

Investors could take this as a positive sign. Although DoubleClick shares lost nearly 90 percent of their value last year--during a time of elevating concern about the viability of online advertising--the stock has gone up by almost 40 percent since Jan. 1 on positive fourth-quarter earnings.

The FTC's investigation began in February 2000 after the company announced plans to compile dossiers of consumer information, intended to better target advertisements to consumers as they surf the Web.

The government agency issued a letter Monday to DoubleClick's lawyers, notifying them of the investigation's end.

The FTC's letter outlines steps that DoubleClick will take to update the next version of its privacy policy. The makeover will include information on the company's use of clear GIFs, or Web bugs; clarification on the opt-out cookie; and modifications to its Internet Address Finder Web site privacy policy that include more up-front guidelines on how data is sold.

The investigation's close could break up the privacy storm clouds hovering over DoubleClick since it announced intentions to merge online and offline data. Although the ad network quickly reversed its position at the time, the investigation touched off a maelstrom of scrutiny from consumer advocates, media and legislators over data-collection practices on the Web.

Online storefronts and advertising networks alike were forced to react to heightened examination by bolstering their privacy practices and polices, as well as by hiring experts to defend the companies.

DoubleClick itself named a chief privacy officer in the past year and kicked off efforts to educate the public about online advertising practices.