Privacy on the ‘Net is gaining ground as a critical issue. When Intel [http://www.intel.com/] gave-in to privacy advocates in January and shut off a digital identifying feature on its new Pentium III processor, it was front-page news in the New York Times [http://www.nytimes.com/].
All the hoopla must be music to the ears of Zero Knowledge [http://www.zks.net], the Canadian start-up that just launched a first-of-a-kind privacy-software application — Freedom — and is busy courting ISPs to help sell it. Developed by noted cryptographer Ian Goldberg, Freedom is a brand new encryption technology that promises to make Internet browsing as anonymous as a trip to the newsstand.
The big question is what impact Freedom will have on e-commerce. Zero Knowledge has already come under fire from marketers and online advertising agencies who insist that collecting information about users is critical to the Web’s success. Pointing to declining banner-ad rates, marketers say increased targeting is crucial to e-commerce. They fear that the ability to hide one’s identity will hinder the growth of e-commerce.
The issue is clear to the vast majority of consumers. In survey after survey, they have said loud and clear that privacy on the Internet is important to them. Thanks to cookies and IP addresses, however, marketers today have the ability to track a user’s every move. And it’s making many people nervous.
Enter Zero Knowledge. The company’s $50 package gives users up to five pseudonyms per year. Advanced encryption technology and specialized routing techniques make it just about impossible for someone to track your moves, says Hamnett Hill, executive vice president of Zero Knowledge.
You install the program, choose a pseudonym and let Freedom take it from there. The program uses some of the strongest available cryptography — from levels starting at 128 bits. That’s several hundred times stronger than the highest standard allowed under U.S. law. Zero Knowledge can use it because it’s Canadian. To further protect your identity, Freedom sends all messages through at least three servers — the first one never knows the destination and the last one never knows the point of origination.
But the use of pseudonyms and encryption technology has e-commerce promoters concerned. “Personal information about consumers has long been collected, bought and sold by merchants on the Web,” says Chris Shipley, executive producer of the Demo conference [http://www.demo.com/] where Freedom recently made its debut. “Freedom gives customers control of that currency for the first time.” The question now is what will be the effect of doing so?
Information officers at corporations share their concern over the ability to browse the ‘Net with a pseudonym. According to a recent CIO KnowPulse poll [http://www.cio.com/knowpulse/], conducted by IDG’s CIO magazine [http://www.cio.com/], 64 percent of the chief information officers believe it’s more important to track customer information than to protect consumer privacy.
“The Internet plays a critical role in enabling companies to stay ahead of the curve and penetrate new areas of business,” explains Lew McCreary, editorial director of CIO magazine. “While customer privacy is a concern, business executives are apparently more focused on obtaining the information that will fuel e-commerce and help their businesses succeed.”
Zero Knowledge argues that the use of pseudonyms will not hamper the growth of e-commerce. Indeed, Hill argues that consumers will be more likely to share demographic information about themselves if marketers don’t know their true identity. There is a difference, notes Hill, between shopping anonymously and doing the same activity with a pseudonym.
As Freedom rolls out, it will be interesting to see which point of view prevails.
