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WWW: worldwide worry

National | Desperation.com? Privacy concerns, Nasdaq doldrums, and ad revenue declines prompt new thinking

Issue: "Tax man's terror," April 14, 2001

Pay per click
Would you pay to use your favorite website? With ad revenues disappointing, major Web players are going to try subscription services again. Pay-for-play ventures are popping up all over: Talk radio fans can now pay $39.95 a year for access to an expanded version of RushLimbaugh.com, which offers archived radio shows along with extra material. Baseball broadcasts have been free over the Net for several years, but now cost $9.95 for the season through RealNetworks. Salon.com, Britannica.com, TheStreet.com, and Variety.com also announced more content for subscribers. Such concepts proved disastrous for numerous content sites in the 1990s: They generated few subscribers and turned free service into an industry standard. Now the backlash against banner ads is prompting companies to find new revenue streams. Many of the sites rediscovering subscription-based service are those with well-known or unique content (Encyclopedia Britannica, Major League Baseball, Limbaugh). Others won't have this option because they aren't well-known, or they compete with others who offer similar content for free. Webmasters who charge money must fight users' rampant belief that anything on the Internet must be free. Surfers already pay for their computer, software, and Internet access. A Consumer Electronics Association survey last month reported that 77 percent of online customers oppose paying for content. Paid sites also lose a major source of attention: links. People who like a certain article can't tell others about it unless they also subscribe. This encourages some to simply repost content, which means that premium content goes out for free. As the Napster debacle shows, Web surfers commonly play fast and loose with copyright laws in ways that are difficult or impossible in the analog world. Today, users are swimming in free content from many sources that can't pay the bills. Unless the economic tide turns, many won't be around in their current form for long. Rebel rant
Dot-coms are dying by the dozen, shattering techno-utopian dreams along the way. So a group of survivors banded together for one big burst of counter-cultural consumerism: A bunch of online companies led by marketing site Iconocast. com declared "Back The Net Day," sending out a call to devoted netizens to help bail out the new economy. They're upset about the "viral lack of confidence" caused by the Nasdaq doldrums and want people to help bring back the blue skies of the late 1990s. "On April 3, visit your favorite online store(s) and make at least one purchase," declared Iconocast CEO Michael H. Tchong. "Or buy 10 shares in a company you admire." He wrote these comments in a letter that readers were supposed to forward to their 10 best online friends. It carried the logos of various online companies, like Excite, McAfee.com, and FreeDrive. BlueMountain.com even offered special "Back The Net" cards that could be sent around as if the event were a holiday. Back The Net Day was strange even by guerrilla marketing standards. The whole thing reeks of desperation. Its logo included a raised fist in the style of 1960s radicalism. The "Back The Net" manifesto claims "the Internet was created and endowed by its Creator with certain unalienable Rights, chief among these: free Access to uncensored Content, the ability to Shop wherever and whenever one chooses and the general pursuit of e-Happiness." Privacy, please
Attention, e-commerce: Protect your customer's privacy yourself or risk government doing it for you. That was the message Dennis Hastert delivered at the Comdex Chicago tech industry trade show. The House Speaker urged corporate leaders to develop industry standards to protect consumers' financial and health information: "You are our future," Mr. Hastert declared. "Your businesses are our future." (In the same speech he also said he supported extending the Internet tax moratorium after it expires this year.) Privacy policies are in a state of uproar in both the online and brick-and-mortar worlds. Companies say they need data to market and conduct day-to-day business. Critics say that this information can be abused, violating an individual's personal space. Targeted ads may be mere annoyance, but consumers have legitimate worries about their banking, credit card, and medical records remaining private. For example, CVS faces a $200 million class-action lawsuit brought by an AIDS patient who says the drug chain bought his medical information without his consent. When the company acquired other stores, it also bought their patient records and allegedly violated customer privacy. A ruling in this case may affect how online pharmacies may join forces when their dot-com owners merge. The Feds already regulate children's privacy, and the 1998 Children's Online Privacy Protection Act (COPPA) requires that websites obtain "verifiable parental consent" before tinkering with any personal information. Even with a law on the books, however, researchers say most websites geared for children don't follow its requirements. The University of Pennsylvania's Annenberg Public Policy Center reported that about half of the 162 sites checked don't have prominent links to their COPPA-mandated privacy policies. And the statements themselves were difficult to find, read, and understand. The few people who find a privacy statement are typically buried in verbiage: They never understand what rights they may be giving up.

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