NebuAd, a company that sells online behavioral targeting software to ISPs, has shut down. In 2007, NebuAd reported that it had raised $30 million in funding and for a while, its software seemed very promising for wireless ISPs that wanted to offer free Wi-Fi in exchange for users viewing ads. The company has always claimed that it did not retain personal information about people viewing websites, therefore it posed no threat to privacy, and that the ads were based solely upon the types of websites that people were visiting.
However, in 2008, the company’s fortunes made a turn for the worse as the US Congress turned its attention to NebuAd’s (and its competitor, Phorm’s) practices. A report by Robert Topolski (“NebuAd and Partner ISPs: Wiretapping, Forgery and Browser Hijacking,”) says that NebuAd “monitors, intercepts and modifies the contents of Internet packets” as people go online and “commandeers users’ Web browsers” to load tracking cookies and collects information from users in order to place ads from ISPs. Neither the users nor the web sites know that NebuAd is intercepting and modifying. Topolski found that NebuAd, after being installed on the WOW! network, injects extra hidden code into a user’s browser that was not sent by the Web site being visited. That code directs the user’s Web browser to another site not requested or even seen by the consumer, where hidden code is downloaded and executed to add more tracking cookies. The consumer then sees ads based on NebuAd’s profile of a user’s browsing habits — built through the secretly collected information (from Public Knowledge).
The revelations triggered a public outcry, resulting in Congressional scrutiny of the practices of companies like NebuAd and Phorm. In September 2008, NebuAd lost its CEO.
Invading people’s privacy is, as they’ve discovered, not such a good business after all.
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