For a while after Gmail’s quiet-as-a-mouse rollout in spring 2004, people buzzed about the privacy implications of ads that are based on emails. Surely people expected Yahoo to respond in kind, which they for the most part have, but what has taken much longer has been Yahoo’s rollout of the Yahoo Publisher Network (YPN). It sets up the possibility for Yahoo to place content-targeted ads on Yahoo Mail, which is responsible for 42% of the time users spend on Yahoo, whereas only 2% of their time is spent on search. My question is this: will they actually put the ads up, and will they face any scrutiny? I think they absolutely will put up ads, but it may not come without some noise: after all, current Yahoo Mail users did not sign up with the full-expectation that targeted ads would be shown to them, so it may require a change in their Terms of Service. A convenient time to make the switch may be when they finally rollout their desktop mail client.
Now that YPN is finally rolling out, we get to ponder if Yahoo will do the unthinkable: utilize its toolbar to block out AdSense ads and replace them with YPN ads. For legal reasons, they will most likely not do it, and even if it was legal, such behavior would not only invite the wrath of Google, but also the attention of hawkers of spyware/adware that would love the opportunity to leverage all the ads displayed on every page a user visits. But somtimes spyware purveyors are slammed not because of the nature of their business, but because of the suspect tactics they employ to get downloads. For example, consider ShopAtHomeSelect (SAHS), a spyware program recently reviewed by spyware-guru Ben Edelman: the idea is that you download the program and SAHS gets commissions from the things that you buy. In theory, users are supposed to get the rebates from those purchases, but Ben uncovers this to not be the case: the shady nature of the program means users often do not input their personal address to receive rebate checks. In fact, many do not even realize they had downloaded it. But Ben is absolutely right that this is not an indictment against the model of giving rebates, just the way in which it is done.
Ben told me in an email, “I tend to think web site rebate sites are legitimate. I personally use Ebates' web-based rebates site, which I think is perfectly honorable. Same for the sites operated by some airlines (paying rebates in the form of frequent flier miles). SAHS differs in its sneakiness and its tenacity -- putting unwanted software directly onto users' PCs, such that there's no substantial reason to think users wanted the programs or agreed to run them; whereas a user who goes to ebates.com (or your hypothetical Yahoo shopping site) clearly does have some interest in that rebate program. Key differences from SAHS include the absence of software (with the associated risks to privacy, security, reliability, etc.), as well as the self-evident user consent.”
That establishes a pretty clear bright line, but what I would be interested in examining further ebates’ toolbar that enables users’ to receive rebates without even clicking through on links through their main site. Ben points out that eBates has engaged in some questionable downloading practices and that the rewards systems that have clean records include FatWallet and the airlines’ frequent flyer programs. So surely eBates’ affiliates have been up in arms and say having a toolbar is not satisfactory demonstration of the user wanting to take advantage of offers? But they have not. Why? Ben explains the incentive problem on the page linked above:
“I think the core problem here is skewed incentives. Affiliate networks (CJ and LinkShare) have no financial incentive to limit Ebates' operation. Instead, the more commissions claimed by Ebates, the more money flows through the networks -- letting the networks charge fees of their own. In principle we might expect merchants to refuse to pay commissions not fairly earned -- but merchants' affiliate managers sometimes have secondary motives too. In particular, affiliate managers tend to get bonuses when their affiliate programs grow, which surely makes them particularly hesitant to turn away the large transaction volume brought by MMM's automatic commission system.”
Essentially, the incentive system is damaging the profitability of their employers’ businesses.
Google’s recent decision to make its autolink feature a default once again begs the question: at what point is it ok to modify what appears on a page, and when is that line crossed? For example, what if Google justifies the expense of its WebAccelerator service by inserting ads on the cached pages it returns? I think internet users in general would be very upset, but what if Google then decides to proceed with these hypothetical plans? It certainly is not without precedent: I love Gmail and personally think the ads are not a problem given they are not intrusive, but swords were drawn over privacy questions. Text ads put on WebAccelerator pages would presumably also not be intrusive.
Regarding programs that block ads appearing on a page, here is a Firefox plugin that blocks ads appearing on Google search results. Because the tool provides no financial reward to the person that uses or the person that created it, does that make it acceptable? So far there have been no lawsuits that I am aware of (but I do not read law journals), and certainly it would be quite an ordeal to have to sue each and every user of the program, especially so considering users already block ads using host files modifications or by simply disallowing any image to appear on a page. Mike Steinbaugh brings up the issue in this blog post, followed by poignant discussion by readers: I do not have the answer, but I am curious what would happen. S
Scroogle.org" appears to be the pioneer in scraping Google Ads from their website and proclaims themselves free of legal violation due to their not profiting from enabling blocking of Google ads. A quote from this page: "The first prong would be a legal effort by Google to stop us. We welcome this, and believe that we can prevail even though our market cap at PIR is somewhat less than Google's $50 billion." Quite a vindictive bunch... "Even if it cuts into (Google's) ad profits slightly, there's no easier way to give back some of what they stole from us." Ouch!
I encourage reader feedback on these issues. I can see some spyware purveyors cutting back on shady downloads in favor of full disclosure to users what they are downloading, and I ask then what are the bounds to which a user is allowed to do on their machine. Remove ads? Replace those ads with Yahoo ads? Replace them with someone elses’ ads and get paid something for what they click on? Certainly the last example would be quite a perverse incentive structure.
How does this relate to social networks? It may not directly apply to the social networks that exist now, but I believe social networks will become more integrated across other services than they are now: imagine Yahoo with social networks spread across music, finance, shopping, search (already starting to do that), and other properties? They are just scratching the surface of what could be done. Certainly if Yahoo 360 is an indicator of their adoption rate, they will have problems, but it is still early. They have time to figure it out.
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