Is it privacy or economics?

One of the most intriguing stories about the Internet isn't how much wealth it's created, but rather its impact on society. 

Each day, it seems, we spend more time on the Internet. We search more, share more, participate more and voice our opinions more. We've probably all become aware of how self-absorbed we are and/or how different we are from others, and we're proud of it.

But is there more about ourselves that we don't know? More that the data we leave behind may reveal?

"The Internet has changed everything," said Schmidt, who held a small session Wednesday with a couple dozen journalists after he was interviewed on stage by search guru Danny Sullivan at the Search Engine Strategies conference in San Jose, Calif.  Schmidt went on to describe how the Internet has obviously improved access to information and the empowerment it's given many, including the press, to gather that knowledge. But the "development to me that's most interesting is the social networks as online lifestyles. That's a really new phenomenon," he said. It's a phenomenon on scale with the rapid-fire adoption of instant messaging, he added. "It's [social networks] a big deal."  Indeed, his words are backed by his actions. On Monday, Google announced that it is paying $900 million to be the exclusive search engine of MySpace along with News Corp's other Net properties. What fascinates me about this deal is the potential to take search history data and marry it with personal data, such as what we like and dislike, who we like and dislike, and basically what makes us tick.  "We do not link," said Schmidt, adamantly. "We try to do things with user permission," he added.

Sure, there may be some privacy issues. But is that all? After all, we've become such a transparent society with high expectations about service (and that means better targeted ads).

Maybe I should have asked him, could Google make more money by using search history to serve up display ads on its partner sites?  Based on a simple analysis and example, it appears that perhaps the incremental benefit of using search history for targeted ads may not be worth it. For that analysis, you'll have to read my column. 

Read Net Sense on MarketWatch

Comments

[Entrepreneur in residence (anonymous)]

Bambi,

with regards to your example on personal targeting in the schmidt conference room.

the power of behavior versus context is that knowing something attractive about a customer behaviorally increases the value of the non valuable context experiences on the web.

for example, i know you love or are looking for cars. that has high value to me that you are looking for cars, you leave the car context and go to the media property around comic strips or do a search on comic strips. i'd rather serve you a car ad than an ad for comic books. why? it's more valuable and you implicitly showed me you are in the mode of looking for cars. theoretically,my yield is going to be better in context media, but also not bad in the comic books or so the reasoning goes. and it's much better use of the comic books inventories to comic book dealers even if the yield is lower. i may not have chosen the right category comic books but feel free to use another.

What we know?
* there is not enough good space/inventory on web properties right now and its going to get worse
* there is a plethora of space and keywords that don't yield enough

Now, the interesting piece. - if you can start to imply that I know bambi is in her 30"s, is active, is single, lives in california, has a good job,

what kind of models could i build to target her and people like her that are most likely concerned about the following:
* traveling, investing, dating ,etc.

It's going to happen. it wasn't clear to me that yahoo or google were fully disclosing what they were doing but you know they are crunching numbers on you and me as we speak. The aol snafu proves the data is out there.

I see new businesses popping up around this all the day.

It's going to be a very interesting next 5 years.

:)

and the minute you start weaving some of the implications of online lifestyles into all this forget about it.

remember, if you don't have an identity online in 5 years in america, you won't exist.

[Raul]

Bambi may be underestimating the privacy issue.

The release of AOL user search data, the wrangling between web search engines and the U.S. government over search data, and the less-known Google Trends (http://www.google.com/trends) for searching user query logs, are just three examples of a trend that deserves scrutiny.

The problem is that user data is profitable, e.g., for targeting ads ever more widely & finely, so data gets collected in ever more detail, leading to "personalized search" which arguably won't benefit web searchers:

http://battellemedia.com/archives/002071.php

One recourse is legislation. Another is for search engines to take a stand on privacy. In January this year, the Clusty.com search engine took a stand, expressed humorously at

http://clusty.com/privacy

So, cookies only for search settings, no email addresses, no tracking of the search results that users click on, etc.

[BF]

Raul:
I have not explored the depths of the privacy issue. But how do you get more personalized search without using search history?

[Tom]

I just wrote about Google's partnerships, and of the many things I read, your article "Google Finds Fountain of Youth in MySpace" was particularly insightful. thanks for that, Bambi!

http://businessblogconsultant.com/blog/2006/08/11/googles-partnerships/

[yeti]

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