Bowing to pressure from privacy advocates and
consumers, online advertising giant DoubleClick today said it will hold off
on plans to combine online and offline data that it collects on
"It is clear...I made a mistake by planning to merge names with anonymous
user activity across Web sites in the absence of government and industry
privacy standards," DoubleClick CEO Kevin O'Connor said in a statement on the company's Web site.
In an interview, O'Connor said the decision was in response to feedback
from hundreds of consumers regarding DoubleClick's plans to link specific
names and addresses to data gathered through its extensive online
advertising network--a move that raised the ire of privacy groups.
O'Connor said today's announcement does not mean the company has given up on
the plan. Rather, he said, DoubleClick has pledged only to delay
moving forward until new guidelines on privacy are hammered out between
government and industry.
"The absence of standards has led to confusion and uncertainty," he said.
"We need clarity to get rid of the uncertainty."
While privacy advocates today cautiously celebrated what they called a
victory in their long-standing dispute with DoubleClick, some said there is
a long way to go in guarding consumer privacy online.
"O'Connor said he's waiting for a consensus between industry and
government," said Ari Schwartz, a spokesman for the Center for Democracy and
Technology in Washington, D.C. "We think the public needs to be there in
that debate, too. We've seen an outpouring of support on this issue far more
than any other campaign we've done."
Pressure on DoubleClick to
bolster its privacy policies has mounted since it completed a $1.7 billion
merger late last year with data-collection agency Abacus Direct, a company
that works with offline catalog companies.
Opponents of the merger worried that the deal would increase the likelihood
of corporate abuse of customer data by combining Net surfing
habits--obtained from the 5 billion ads DoubleClick serves per week--with
personal information from the 2 billion transactions recorded by Abacus.
Those fears came to a head last month, when DoubleClick changed its privacy
policy to allow the linking of its database of consumer profiles with data
gleaned from electronic markers, known as cookies. It also said it would
make that information available to members of a new advertising network
called the Abacus Alliance.
Since then, DoubleClick has been hit with several lawsuits relating to
alleged privacy violations. The Federal Trade Commission also is investigating DoubleClick's
In a Feb. 14 filing with the Securities and Exchange Commission, DoubleClick
disclosed that the FTC is investigating its handling of consumer
information. At the time, the company's shares were trading around $110.
The stock traded as high as $135 on Jan. 3.
Its shares fell $9, or 10 percent, to $79.81 yesterday after partners
AltaVista and Kozmo.com backed
away on concern about DoubleClick's handling of privacy issues.
At the 1 p.m. PST close of regular trading today, DoubleClick shares were up
$2.88 to $83.44.
The focus for DoubleClick now turns to lobbying efforts on Capitol Hill as
pressure on Congress grows to develop privacy legislation.
In January, DoubleClick hired Josh Isay, who gained a reputation on The Hill
as a political whiz kid who helped mastermind the winning campaigns of Sens.
Chuck Schumer (D-N.Y.) and Robert Torricelli (D-N.J.).
Isay, 29, joined DoubleClick as director of public policy and government
affairs, taking over as lead lobbyist.
"He's young, but he's very highly regarded," said one privacy advocate who
didn't want to be named.
Isay could not immediately be reached to comment on his strategy now that
the New York advertising firm said it will wait for federal
regulators and legislators to grapple with online privacy.
News.com's Patricia Jacobus contributed to this report.