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Senator Rockefeller Warns Marketing Data Giants: You’re On Notice

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Video Flag Z by Nam June Paik
Video Flag Z by Nam June Paik

We’ve long been dismayed by how powerful and secretive the massive data broker corporations have become. Our data is collected, often surreptitiously, then repackaged and sold to other corporations, and we don’t get a percentage of the profits, nor any real notice that this is happening.

Good news, maybe, from Washington, as reported by Kate Kaye of AdAge:

Today the Senate Commerce Committee held a long-awaited hearing about the consumer-data-broker industry.

“We have a feeling people are getting scammed or screwed,” said Senator Jay Rockefeller, D-W.V., whose office sent inquiries to several data brokers in the past year. He called out data giants Acxiom, Epsilon and Experian, threatening to use more forceful ways of getting them to divulge information about how they do business and with whom.

One concern shared by Mr. Rockefeller and privacy advocates is predatory marketing activity conducted by financial firms or other companies targeting vulnerable groups such as the impoverished or immigrant populations. Another concern is the practice of scoring individuals determined by algorithmic data analysis and serving them with tailored offers. In some cases that could involve higher interest rates for loans or dynamic prices for products based on prior web behavior or demographic data.

“To date they have not given me complete answers,” said Mr. Rockefeller of Acxiom, Epsilon and Experian. “I’m putting these three companies on notice today…that I am considering further steps and I have steps I can use to get this information.”

Mr. Rockefeller sent letters to data companies such as Acxiom, Datalogix, Epsilon, Experian and Transunion in June, then broadened the inquiry to include media firms — typically big collectors of behavioral web data — like About.com, Babycenter.com, Cafemom.com, Time’s Health.com and Conde Nast’s Self.com.

 

(click here to continue reading Rockefeller to Marketing Data Giants: You’re On Notice | Privacy and Regulation – Advertising Age.)

Bares paying attention to…

Written by Seth Anderson

December 19th, 2013 at 11:04 am

Internet groups whine about new online privacy rules for children

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 Miniature Office Globe

Oh, cry me a river. I’d love to have the same options available for myself! Kids luckily have some protection from being subsumed by the data collection industry, but not much. Adults – not even a token bit of assistance.

Internet groups complained Monday that new Federal Trade Commission regulations to protect children’s privacy online are financially burdensome to start-up companies.

Under regulations that went into effect July 1, websites catering to children will no longer be able to collect a range of identifying information without obtaining verifiable parental consent.

The child protection regulations will now hold the owners of sites and apps frequented by children responsible for third-party services — such as plug-ins or ads — that collect personal information from visitors who say they’re younger than 13. The third-party services will be held liable only if the FTC can prove they knowingly collected personal information from children.

Kid-friendly websites that want to use such ads to provide free content to kids, or that want to collect personal information for interactive content, now have to either get parental consent or forgo the content altogether, as some tech experts worry they’ll do.

“The biggest challenge here is that the commission defines personal information in a way that is so incredibly broad,” said Lydia Parnes, the former director of the FTC’s Bureau of Consumer Protection and now a privacy lawyer, at a gathering of data experts and representatives of Internet companies in Washington.

 

(click here to continue reading Internet groups decry cost of new online privacy rules for children – latimes.com.)

Embarrass
Embarrass

 Have you ever tried to opt out of Acxiom’s database, for instance? Good luck. And they are just one firm out of thousands that Ghostery knows about. Unless you are paying attention to that industry, you’ve never heard of most of them, have no business relationship with them, nor consent to your information being bought and sold. Tough luck, unless you are under 13…

Written by Seth Anderson

July 11th, 2013 at 11:54 am

Posted in Advertising,Business

Tagged with ,

Organic Eden Foods’ quiet right-wing agenda

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Right Wing Ideologues

Personally, Eden Foods’ political stance gives Eden Organic beans a musty, old fashioned flavor, a flavor of the 15th century, a time when the Catholic Church decided for you what was legal or illegal, accepted or unaccepted. 

The slogan for Eden Foods, which describes itself as the “oldest natural and organic food company in North America,” is “creation and maintenance of purity in food.” Its CEO and founder, Michael Potter, has been prominent in debates over labeling of organic food and GMOs. But the company has been quietly seeking in court another form of purity — to Catholic doctrine about sex being solely for procreation. That goes not just for Potter, but for all 128 of his employees.

That is, Eden Foods — an organic food company with no shortage of liberal customers — has quietly pursued a decidedly right-wing agenda, suing the Obama administration for exemption from the mandate to cover contraception for its employees under the Affordable Care Act. In court filings, Eden Foods, represented by the conservative Thomas More Law Center, alleges that its rights have been violated under the First Amendment, the Religious Freedom Restoration Act, and the Administrative Procedure Act.

Eden Foods, which did not respond to a request for comment, says in its filing that the company believes of birth control that “these procedures almost always involve immoral and unnatural practices.” The complaint also says that “Plaintiffs believe that Plan B and ‘ella’ can cause the death of the embryo, which is a person.” (Studies show that neither Plan B nor Ella interfere with fertilization, which is the Catholic definition of the beginning of life, if not the medical one. In other words, not the death of an embryo. Also, at that stage, it’s a zygote, not an embryo — let alone a “person.”)

But once Potter became aware that the company’s plan had begun to cover contraception in accordance with the Obamacare regulations, he teamed up with Thomas More Law Center to sue. The Center focuses on violations of “religious freedom,” including in connection with the repeal of Don’t Ask Don’t Tell. They also represented Pastor Terry Jones, who became famous for his plan to burn Korans on the anniversary of 9/11.

They filed suit on March 20, 2013, against Secretary of Health and Human Services Kathleen Sebelius and other government parties, demanding an exemption, despite the fact that Eden Foods is a for-profit company. Two days later, District Court Judge Denise Page Hood denied an emergency motion to be exempted, writing, “Courts have held that the Mandate in question applies only to the corporate entity, not to its officers or owners, and that as to the individual owners, any burden imposed on them individually by the contraception mandate is remote[.]” She added, “The purpose of the Women’s Preventive Healthcare Regulations is not to target religion, but instead to promote public health and gender equality.” A hearing has been set for May 10.

 

(click here to continue reading Organic Eden Foods’ quiet right-wing agenda – Salon.com.)

Eden Foods: Another company that deserves to lose in the marketplace. I’ll no longer purchase any product of theirs, that’s for damn sure, and I don’t even have a uterus, pure or not.

Eden Foods believes in the sanctity of your uterus

Katie Baker of Jezebel adds:

Eden Foods, an independently owned natural food company, is just as interested in the “Creation and Maintenance of Purity in Food®” as the maintenance of purity in your uterus: the company is suing the Obama administration for exemption from the contraceptive mandate. Owner Michael Potter believes sex is for baby-making alone, and hopes to force his 128 employees to follow suit.

In court filings, the plaintiffs (Eden Foods and Potter) lay out the reasons why Potter’s personal and nonsensical beliefs regarding birth control and emergency contraception — which Eden Foods has historically referred to as “Lifestyle Drugs” (we hear all the It Girls will be popping Yasmin at Coachella this year!) — should take precedence over reproductive choice. Examples: the company believes that contraception and abortifacients “almost always involve immoral and unnatural practices” and that the morning-after pill “can cause the death of the embryo, which is a person.” (No, it can’t, and if an embryo is a person, I’m a bag of “organic whole leaf dulse.”)

It’s unsurprising when Christian publishing companies and craft supply stores fight the contraception mandate. (We covered the first 18 for-profit companies that fought to eliminate the birth control benefit earlier this year; now 25 have filed suit.) But doesn’t it seem rather misleading for Eden Foods, which says it’s the “oldest natural and organic food company in North America,” to hide its conservative agenda?

(click here to continue reading Organic Eden Foods Isn’t Progressive Enough to Pay For Its Employees’ Birth Control.)

 I don’t care about your religious beliefs, but I don’t have to support them with my dollars. Women who want their insurance company to cover contraceptives shouldn’t be at the mercy of jerks like Michael Potter.

Written by Seth Anderson

April 11th, 2013 at 9:32 am

Brian Sanders Creates ‘Mad Men’ Poster for New Season

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It’s the Future

It’s the Future

Earlier today…

The image recalls work that Mr. Sanders did for an even more famous screen project. In 1966 he was asked by Stanley Kubrick, who had seen some of his experimental, noncommercial collages, to spend months with unfettered access to the set of “2001: A Space Odyssey” and illustrate scenes from the filming. Most of the images remained unpublished for decades. (Kubrick, famously averse to set photographers, seemed to have been ambivalent even about drawings.) But the experience was a formative one for Mr. Sanders in honing an illustration style that balanced slightly trippy abstraction with a concrete feeling of reportage.

Via:
Brian Sanders Creates ‘Mad Men’ Poster for New Season
[automated]

Written by eggplant

March 12th, 2013 at 1:18 pm

Posted in Advertising,Links

Tagged with , ,

Delicious Twitter Feedburner IFTTT problems again

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Defunct Tweets
Defunct Tweets

For a long time, I had worked out a good system, using Delicious, Twitter, Feedburner and IFTTT. I found interesting articles or phrases in my daily internet life, tweeted them, and these URLs would be automatically fed into my Delicious account, and this in turn would seed entries into my daily blog email post1. Thus my blog’s hunger stayed fed, and I didn’t have to go to the trouble of creating an entire post around a few sentences. However, Twitter, in its drive to become less useful, has disallowed this kind of interaction by changing its APIs. Twitter wants to force every user interaction to occur on its own webpage, presumedly so they can sell advertising “eyeballs” – viewers – but this means a lot of the cool stuff that Twitter could be used for no longer are viable. At least that is my understanding of what happened between yesterday and today.

I’ll see what I can do to replace this lack of grist for my web grinding mill, but it is irritating. Anyone have any suggestions? Email me, or leave a comment.

Here is what should have been included in this morning’s blog email2:

  • “Mother Cabrini Shrine Reopening; Le Corbusier in Color; More!” http://t.co/w9ainEtn
  • “Ross Douthat’s schtick at The Atlantic: repeating Redstate talking points, minus the obscenity and grammatical errors” http://t.co/rkJVN0eH
  • “Todd Akin compared the recent debate performance of Democratic Sen. Claire McCaskill to that of a “wildcat,” http://t.co/JOmjmi29
  • “In 1960, about 5% of Americans expressed a negative reaction to political intermarriage; in 2010, about 40% did ” http://t.co/ONkWfpDk
  • “Pro-life asshole vows to fight “to his dying breath” for rights of unborn” http://t.co/bMJ6qFwc C’mon Canada, you are better than this
  • Opium Museum http://t.co/vTfSaJm4 
  • “How Collecting Opium Antiques Turned Me Into an Opium Addict” http://t.co/KWV4aoey
  • “Romney mentioned that it would routinely take up to eight years to turn around a firm” http://t.co/xdbBghjv but US govt easier?
  • Why Ryan is worse for Romney than “47 percent” http://t.co/79gHpcPE
  • Brad DeLong: I Do Not Understand Why This Is Not Tax Fraud… http://t.co/wLipfAfZ Good ole DoubleClick
  • Your Body’s Best Time for Everything http://t.co/N7KUjLQj

And actually, I’m being a little lazy in my cut/paste job here, as these links would also have included the full, original title of the URL, which is sometimes descriptive as well. For instance, the second link about Ross Douthat would have also spelled out “And If Only The Vietnamese Had Worn Bright Red Coats And Formed Infantry Squares”. You get the idea.

Anyway, thanks for messing up my workflow Twitter…

Footnotes:
  1. and in the sidebar over there to the right if you visit the actual blog page []
  2. along with whatever photos I uploaded to Flickr, and if I had written an actual blog post like the one you are reading []

Written by Seth Anderson

September 28th, 2012 at 9:02 am

Posted in Advertising,blog

Tagged with ,

Google Needs Apple Too

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Redistribution
Redistribution

Feud is the wrong word, really, these are just competing businesses, not personal enemies, but still bears watching their competition unfold. At least this article in the NYT isn’t just trolling Apple, like Joe Nocera’s bit of vomit from yesterday.

Being kicked off the iPhone has potentially significant consequences for Google, whose Maps service earns more than half its traffic from mobile devices, and almost half of that mobile traffic has been from iPhone users. Apple’s move strikes at the heart of Google’s core business, search, because about 40 percent of mobile searches are for local places or things.

“Local is a huge thing for Google in terms of advertising dollars, and search is very tied to that,” said Barry Schwartz, an editor at Search Engine Land, an industry blog. “Knowing where you are, when you search for coffee, it can bring up local coffee shops and ads that are much more relevant for the user.”

But with maps, Google, which has long been the dominant digital mapmaker, now must adjust to a new rival, along with the loss of valuable iPhone users.

Even though Android phones far outnumber iPhones — 60 percent of smartphones run Android, versus 34 percent for iPhones, according to Canalys, a research firm — iPhone users account for almost half of mobile traffic to Google Maps.

In July, according to comScore Mobile Metrix, 12.6 million iPhone users visited Maps each day, versus 7.6 million on Android phones. And iPhone users spent an hour and a half using Maps during the month, while Android users spent just an hour.

Those users are a valuable source for Google, because it relies on their data to determine things like which businesses or landmarks are most important and whether maps have errors.

(click here to continue reading Apple’s Feud With Google Is Now Felt on the iPhone – NYTimes.com.)

I welcome the rivalry, maps will1 improve for all users as a result.

Footnotes:
  1. should? []

Written by Seth Anderson

September 23rd, 2012 at 11:57 pm

Posted in Advertising,Apple,Business

Tagged with , ,

Google’s paltry FTC Fine is a joke

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Nickles Not Pickles
Nickels Not Pickles

You might have heard that Google engineers created a way to surreptitiously collect data on all Safari users – including all iPad, iPhone and iPod Touch users – ignoring the privacy settings. As a result of a computer scientist by the name of Jonathan Mayer, his investigation, and a subsequent media uproar, the FTC got involved, and eventually fined Google a few nickels.

The Federal Trade Commission fined Google $22.5 million on Thursday to settle charges that it had bypassed privacy settings in Apple’s Safari browser to be able to track users of the browser and show them advertisements, and violated an earlier privacy settlement with the agency.

The fine is the largest civil penalty ever levied by the commission, which has been cracking down on tech companies for privacy violations and is also investigating Google for antitrust violations.

“The social contract has to be that if you’re going to hold on to people’s most private data, you have to do a better job of honoring your privacy commitments,” said David C. Vladeck, the director of the commission’s Bureau of Consumer Protection, in a call with reporters. “And if there’s a message the commission is trying to send today, it’s that.”

The commission said Google had broken the terms of a 2011 settlement over privacy missteps related to the Buzz, a social networking tool now defunct.

(click here to continue reading F.T.C. Fines Google $22.5 Million for Safari Privacy Violations – NYTimes.com.)

 And I say nickels, because, to quote an earlier blog post:

The fine for violating the agreement is $16,000 per violation, per day. Because millions of people were affected, any fine could add up quickly, depending on how it is calculated

(click here to continue reading FTC Should Pursue Case Against Google at B12 Solipsism.)

Ride Smarter
Ride Smarter

Let’s do the math, as best we can on this convenient envelope on my desk. Google broke their agreement for about a year.1 Even if there was only one violation per day, this adds up to $5,840,000 in fines. But there are probably 200,000,000 iOS devices in active use2, plus desktop Macs running Safari, so potentially, Google was liable for 200,000,000 x 365 x $16,000 =  $1,168,000,000,000,000  in fines. Doh! Of course, the FTC doesn’t have the gumption to fine any corporation that much.  Instead they fined Google $22,000,000. 

For comparison, Google’s annual revenue is over $43,000,000,000 (per their 2nd Q 2012 report PDF). $22.5 million divided by $43.16 billion is 0.05213%. A joke in other words, a rounding error. If you made $50,000 a year in gross salary, and you got a fine of this magnitude, you’d pay…wait for it…$26. Yep, just twenty six dollars. Would it be worth it to you to pay a couple bucks a month in exchange for sellable advertising data on 200 million phones and iPads? Hell yes! Those cookies are a large reason why Google makes $43 billion a year, obviously they are valuable!

Google got off way, way too easily.

Let Me Show You How to Eagle Rock
Let Me Show You How to Eagle Rock

What about those incompetent boobs at the Federal Trade Commission? The FTC isn’t very motivated to snoop out privacy invasions in the first place, as Wired reported back in June, 2012:

Jonathan Mayer had a hunch.

The young computer scientist suspected that online advertisers might be following consumers around the web — even when they set their browsers to block the snippets of tracking code called cookies. If Mayer’s instinct was right, advertisers were eying people as they moved from one website to another even though their browsers were configured to prevent this sort of digital shadowing. Working long hours at his office, Mayer ran a series of clever tests in which he purchased ads that acted as sniffers for the sort of unauthorized cookies he was looking for. He hit the jackpot, unearthing one of the biggest privacy scandals of the past year: Google was secretly planting cookies on a vast number of iPhone browsers. Mayer thinks millions of iPhones were targeted by Google.

The feds are often the last to know about digital invasions of your privacy. This is precisely the type of privacy violation the Federal Trade Commission aims to protect consumers from, and Google, which claims the cookies were not planted in an unethical way, now reportedly faces a fine of more than $10 million.  But the FTC didn’t discover the violation. Mayer is a 25-year-old grad student working on law and computer science degrees at Stanford University. He shoehorned his sleuthing between classes and homework, working from an office he shares in the Gates Computer Science Building with students from New Zealand and Hong Kong. He doesn’t get paid for his work and he doesn’t get much rest.

If it seems odd that a federal regulator was scooped by a sleep-deprived student, get used to it, because the federal government is often the last to know about digital invasions of your privacy. The largest privacy scandal of the past year, also involving Google, wasn’t discovered by federal regulators, either. A privacy official in Germany forced Google to hand over the hard drives of cars equipped with 360-degree digital cameras that were taking pictures for its Street View program. The Germans discovered that Google wasn’t just shooting photos: The cars downloaded a panoply of sensitive data, including emails and passwords, from open Wi-Fi networks. Google had secretly done the same in the United States, but the FTC, as well as the Federal Communications Commission, which oversees broadcast issues, had no idea until the Germans figured it out.

(click here to continue reading Your FTC Privacy Watchdogs: Low-Tech, Defensive, Toothless | Threat Level | Wired.com.)

No wonder Google, and Microsoft, and others, spend so much money on lobbyists

Google spent $5.03 million on lobbying from January through March of this year, a record for the Internet giant, and a 240 percent increase from the $1.48 million it spent on lobbyists in the same quarter a year ago, according to disclosures filed Friday with the clerk of the House.

By comparison, Apple spent $500,000; Facebook spent $650,000 Amazon spent $870,000; and Microsoft spent $1.79 million. Google even outspent Verizon Wireless, a notoriously big spender, which spent $4.51 million.

(click here to continue reading Under Scrutiny, Google Spends Record Amount on Lobbying – NYTimes.com.)

Footnotes:
  1. maybe a little more, I read somewhere the period was 18 months, but we’ll say a year for rounding purposes []
  2. again, estimating. In this case, from an article dated Feb, 12, 2012, noting that Apple sold 156,000,000 in 2011 alone. []

Written by Seth Anderson

August 10th, 2012 at 12:14 pm

Posted in Advertising,Apple,Business

Tagged with , ,

Acxiom Consumer Data Unavailable to Consumers

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Old Number Two
Old Number Two

Funny how this works: databases containing all sorts of data about you is compiled by giant, somewhat secretive corporations, and then rented out to corporations so marketers can sell their goods and services to you, and yet you have no access to the data. For what it’s worth, I took the time to opt out of Acxiom’s system, based on my email address, but who knows if they really removed me. I doubt it, but there is no way to verify or confirm in any case. We are just numbers to them, not people.

I recently asked to see the information held about me by the Acxiom Corporation, a database marketing company that collects and sells details about consumers’ financial status, shopping and recreational activities to banks, retailers, automakers and other businesses. In investor presentations and interviews, Acxiom executives have said that the company — the subject of a Sunday Business article last month — has information on about 500 million active consumers worldwide, with about 1,500 data points per person. Acxiom also promotes a program for consumers who wish to see the information the company has on them.

As a former pharmaceuticals industry reporter who has researched all kinds of diseases, drugs and quack cures online, I wanted to learn, for one, whether Acxiom had pegged me as concerned about arthritis, diabetes or allergies. Acxiom also has a proprietary household classification system that places people in one of 70 socioeconomic categories, like “Downtown Dwellers” or “Flush Families,” and I hoped to discover the caste to which it had assigned me.

But after I filled out an online request form and sent a personal check for $5 to cover the processing fee, the company simply sent me a list of some of my previous residential addresses. In other words, rather than learning the details about myself that marketers might use to profile and judge me, I received information I knew already.

It turns out that Acxiom, based in Little Rock, Ark., furnishes consumers only with data related to risk management, like their own prison records, tax liens, bankruptcy filings and residential histories. For a corporate client, the company is able to match customers by name with, say, the social networks or Internet providers they use, but it does not offer consumers the same information about themselves.

(click here to continue reading Acxiom Consumer Data, Often Unavailable to Consumers – NYTimes.com.)

Numbers Add Up to Nothing
Numbers Add Up to Nothing

and I’m totally in favor of the FTC forcing these companies to become more transparent, based upon the historical precedent of the credit card industry’s standard practice:

Now federal regulators are pressuring data brokers to operate more transparently. In a report earlier this year, the Federal Trade Commission recommended that the industry set up a public Web portal that would display the names and contact information of data brokers, as well as describe consumers’ data access rights and other choices.

Julie Brill, a member of the Federal Trade Commission, said consumers should have access to all the details that data brokers collect on them, as well as any analyses that the companies sell about their behavior.

“I include in that not just the raw data, but also how that information has been analyzed to place the consumer into certain categories for marketing or other purposes,” she said. “I believe that giving consumers this kind of granularity will greatly increase consumer trust in the information flow process and will lead to more accurate marketing.”

At the moment, however, information brokers have wildly different policies. Acxiom lets people opt out of its marketing databases, while Epsilon, another marketing services firm, allows people to opt out of having their data rented to third parties. Epsilon says it will also furnish individuals, upon request, with general information about their past retail transactions — including the categories and years of purchase. But it does not include exact product or retailer names.

Commissioner Brill of the F.T.C. said she could not comment on specific companies. But she said the reluctance of the data broker industry to show consumers their own records reminded her of an earlier era, when consumer reporting agencies — companies that track and sell information about people’s credit histories — protested that it would be too expensive and time-consuming for them to show individuals the same reports that creditors could see. In 1996, Congress updated the Fair Credit Reporting Act of 1970, giving people greater access to the files that those agencies held about them. Today, consumers can easily gain access to their credit reports online.

“What the credit reporting industry did was change their point of view from client-oriented to consumer-oriented, and develop the tools and technology to allow consumers to see what’s in their reports and ensure it is accurate,” Ms. Brill said. “The data broker industry could do the exact same thing.”

(click here to continue reading Acxiom Consumer Data, Often Unavailable to Consumers – NYTimes.com.)

Written by Seth Anderson

July 23rd, 2012 at 6:07 am

The Facebook IPO scandal

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To A We
To A We

And speaking of Facebook’s deplorable business model, there turns out to be some Wall Street shenanigans going on as the IPO began. Lest you forget, Wall Street plays by its own rules, and if you want to play too, you are the mark, the rube. The amount of hype for the Facebook stock was, and remains overwhelming. That alone should make one suspicious. I know I was1

The Los Angeles Times reports:

As Facebook shares continued their slide, regulators launched inquiries into whether privileged Wall Street insiders were alerted to the company’s weakening financial projections, leading them to shun the stock or dump shares just as buying was opened to the public.

Morgan Stanley, which led the Wall Street effort to bring the social network public, came under fire following reports that the bank had told some favored clients that the bank was cutting its revenue estimates for Facebook. The lowered expectations came after the tech giant expressed caution in a public filing about its advertising sales on mobile devices.

The legal issue raised could be “securities fraud — plain and simple,” said Ernest Badway, a securities lawyer in New York and New Jersey and a former enforcement attorney at the U.S. Securities and Exchange Commission. “You can’t be putting out two sets of numbers.”

SEC Chairwoman Mary Schapiro said the agency will examine “issues” into the bungled Facebook public offering. The Financial Industry Regulatory Authority, the Wall Street industry-funded watchdog, has also expressed concern, and Massachusetts securities regulators have issued subpoenas for Morgan Stanley.

“If true, the allegations are a matter of regulatory concern to FINRA and the SEC,” Rick Ketchum, the watchdog’s chairman and chief executive, said in an e-mailed statement.

One major institutional investor was informed of the lowered expectations during Facebook’s IPO “roadshow,” in which Morgan Stanley and other underwriters appeared before mutual funds and other big investors to make the case to buy shares in advance of the public offering.

“I am pretty sure the grandma who bought 10 shares of Facebook through her Schwab account didn’t get that memo,” said a person familiar with the matter who declined to be named to preserve his business relationship with Wall Street investment banks.

Facebook’s offering was one of the most hyped events on Wall Street, and became the biggest tech IPO in history. The company raised $16 billion by listing on the Nasdaq Stock Market in a move that valued the company at $104 billion, which is bigger than American corporate stalwarts such asMcDonald’s Corp. andAmazon.com Inc.

(click here to continue reading Facebook IPO flop drawing increased scrutiny – latimes.com.)

I found this phrase telling:

Some bankers were also troubled by the huge demand from individual investors, a relatively capricious group. While Facebook allocated most of its shares to big, institutional investors like mutual funds and hedge funds, it also gave a larger-than-usual block, close to 25 percent, to ordinary investors.

Around the same time, red flags emerged about the company’s growth prospects. On May 9, Facebook revealed in a regulatory filing some potential challenges to its growth. In particular, the company highlighted that users were increasingly using Facebook on mobile devices, but the company was not making much money on mobile ads.

(click here to continue reading Facebook I.P.O. Raises Regulatory Concerns – NYTimes.com.)

Banks don’t want the hoi polloi  to clutter up their hallways, mess up their nice tile floors.

Stay As You Are

Stay As You Are

Gawker’s Adrian Chen:

Facebook’s stock continues to suck harder than a Northwestern University freshman on a 5-foot bong in his profile pic. And the fallout from the most hyped IPO in history bursts not just the illusion that Facebook is actually worth $100 billion, but the idea that Facebook is different than any other corporation hell-bent on making as much money as possible for a handful of very wealthy people.
The lead-up to last Friday’s Facebook IPO was an orgy of web 2.0 populism. Started by a Harvard undergrad in his dorm room, Facebook was poised to become the largest tech IPO ever. And its value stemmed from our stuff—our status updates, pictures and pokes! This was the major driver of the outlandish hype surrounding Facebook’s IPO; the sense that the public would finally get a chance to share in the spectacular success of the company we helped build.

…(Incidentally, now that Facebook’s tanking, Morgan Stanley and the other banks that underwrote the deal have a good shot at making a profit by short selling millions of Facebook shares that had been created just for them under an arcane financial move known as the “Greenshoe option.” Nice deal, if you can get it.)

These maneuvers show once again that Facebook’s lofty ideals are at odds with how it functions in reality. For a company built on sharing and transparency, Facebook’s IPO was uniquely private and opaque. For a company which Mark Zuckerberg boasted in a letter to investors “was not originally created to be a company. It was built to accomplish a social mission,” Facebook sure as hell acted like a company in helping to enrich insiders at the expense of public investors.

So, Mark Zuckerberg screwed Facebook investors in the IPO like he’s screwed Facebook users on privacy. (Hours before the IPO, Facebook was hit with a $15 billion lawsuit over privacy violations.) This would be just a hilarious coincidence, except for the vast amounts of money he’s made doing both.

(click here to continue reading The Facebook IPO Was an Inside Joke.)

Every Ace Got Played
Every Ace Got Played

Felix Salmon writes:

This whole episode stinks. It’s almost certainly not illegal. But if you look at the Finra rules about such things, it definitely violates the spirit of the law. For instance, the rules say that Morgan Stanley analysts weren’t allowed to show Facebook their research before it was published — but they don’t say that Facebook can’t quietly whisper in Morgan Stanley’s ear that its estimates might be a bit aggressive. Obviously, there’s no need for the analysts to give Facebook advance notice of their earnings downgrade if that earnings downgrade was a direct consequence of something Facebook told them.

Similarly, Morgan Stanley isn’t allowed to publish a research report or earnings estimates for Facebook within the 40 days following the IPO. But a few days before the IPO? I guess that’s OK — even if the way the estimates were “published” meant they were only available to good friends of the bank.

More generally, the rules ignore the key point here. Retail investors, and the market as a whole, knew when Facebook had its IPO that Morgan Stanley (and JP Morgan, and Goldman Sachs) had research teams with estimates for Facebook’s future earnings. They also knew that those estimates would be made public in 40 days’ time. And if they were sophisticated enough, they probably knew that select Morgan Stanley clients were given access to the analysts and their estimates.

What they didn’t know — what they couldn’t know, because nobody told them — was that those estimates had been cut, significantly, just days before the IPO.

(click here to continue reading The Facebook earnings-forecast scandal | Felix Salmon.)

Selling Her Spare Favors
Selling Her Spare Favors

John Cassidy of The New Yorker points out there have been trades of Facebook for years now, just not public trades. In other words, the big investors already cashed out…

The fact is, Facebook’s I.P.O. wasn’t really an “initial” stock offering. In December, 2010, Goldman Sachs raised $500 million for the company in a deal that, following objections from the Securities and Exchange Commission, was limited to overseas investors. In the I.P.O. world, these late-stage quasi-public offerings are called “D-rounds,” and they are becoming increasingly common. Zynga did one before its I.P.O., and so did Groupon. They provide a cashing-out opportunity for insiders who would rather not wait until the I.P.O. More to the point, they allow “hot” companies to bid up the price of their stocks well before the investing public gets a sniff.

Groupon’s D-round, which raised $950 million in January, 2011, valued the company at close to $5 billion. (It is now valued at $8 billion.) The Goldman offering for Facebook valued the company at $50 billion. (It is now valued at about $95 billion.) The valuations put on the companies in these deals were quickly reflected in the so-called “gray market,” where investors in the know could buy and sell the firms’ stocks well before they started trading on the open markets. Now that Facebook’s stock is trading publicly, many of the early players have already sold out, taking a handsome profit.

How will the public investors fare? So far, they aren’t doing well, but it is still early. I said the other day that Facebook isn’t necessarily a bubble stock, but it is undoubtedly a very expensive one. Buyers are bearing a lot of risk, and it is hard to see them ever reaping the sort of returns that investors in companies like Amazon and Google enjoyed. At twenty-five times trailing revenues and a hundred times trailing earnings, the $38 I.P.O. is already discounting an awful lot of expansion—and this at a time when Facebook’s growth rate has already slowed.

(click here to continue reading Inside Job: Facebook I.P.O. Shows the System Is Broken : The New Yorker.)

And over and over we read the phrase, “unsuccessful IPO”, and yet what does that mean? The bankers got theirs, the Facebook execs got theirs…

may have doomed any real chance the social-networking company had that its stock would jump on its first day of trading—a hallmark of successful IPOs. On Tuesday, the second full day of trading, Facebook shares fell $3.03, or 8.9%, to $31, after falling 11% on Monday. Investors are blaming the downdraft on the last-moment expansion of the offering.

Securities and Exchange Commission Chairman Mary Schapiro said Tuesday that her agency will examine “issues” surrounding the IPO in an effort to ensure confidence in public markets. An SEC spokesman declined to elaborate.

(click here to continue reading Inside Fumbled Facebook Offering – WSJ.com.)

Immigration Rally: May Day, 2006 - The Flag Guy
Immigration Rally: May Day, 2006 – The Flag Guy

Some paid for the money with coin that I wouldn’t be happy paying with, namely being banned from the US. Is the money really worth it? I’d say no, but I like living in America.

Facebook co-founder Eduardo Saverin’s decision to renounce his U.S. citizenship just in time to avoid a large tax payment essentially means he will not be able to re-enter the United States again, immigration experts tell TPM.

“There’s a specific provision of immigration law that says that a former citizen who officially renounces citizenship, and is determined to have renounced it for the purpose of avoiding taxation, is excludable,” said Crystal Williams, executive director of the American Immigration Lawyers Association. “So he would not be able to return to the United States if he’s found to have renounced for tax purposes.”

Two immigration lawyers said his explanation hardly passes the laugh test. Saverin’s move was timed to the initial public offering of shares of Facebook stock. The valuation of the Facebook IPO explodes Saverin’s stake in the social media company to some $3 billion, on which avoiding taxes could save him at least tens — if not hundreds — of millions of dollars. Nor does it help his case that he relocated to Singapore, which levies no taxes on those earnings.

Two senators mobilized Thursday to crack down on Saverin and other tax dodgers.

“He’s fucked,” said Adam Green, an immigration lawyer based in Los Angeles. “He must have gotten horrendous advice.”

(click here to continue reading Renouncing Citizenship Makes Facebook Co-Founder Inadmissable To US | TPMDC.)

Footnotes:
  1. I tweeted thus on May 17

    []

Written by Seth Anderson

May 23rd, 2012 at 7:54 am

The Facebook Fallacy

with 2 comments

Coins of Realms
Coins of Realms

Very interesting point – is Facebook really a viable business? Will it be around in ten years? Will it be profitable? How?

Facebook is not only on course to go bust, but will take the rest of the ad-supported Web with it.

Given its vast cash reserves and the glacial pace of business reckonings, that will sound hyperbolic. But that doesn’t mean it isn’t true.

At the heart of the Internet business is one of the great business fallacies of our time: that the Web, with all its targeting abilities, can be a more efficient, and hence more profitable, advertising medium than traditional media. Facebook, with its 900 million users, valuation of around $100 billion, and the bulk of its business in traditional display advertising, is now at the heart of the heart of the fallacy.

The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter, a consequence of their simultaneous ineffectiveness and efficiency. The nature of people’s behavior on the Web and of how they interact with advertising, as well as the character of those ads themselves and their inability to command real attention, has meant a marked decline in advertising’s impact.

I don’t know anyone in the ad-Web business who isn’t engaged in a relentless, demoralizing, no-exit operation to realign costs with falling per-user revenues, or who isn’t manically inflating traffic to compensate for ever-lower per-user value.

Facebook, however, has convinced large numbers of otherwise intelligent people that the magic of the medium will reinvent advertising in a heretofore unimaginably profitable way, or that the company will create something new that isn’t advertising, which will produce even more wonderful profits. But at a forward profit-to-earnings ratio of 56 (as of the close of trading on May 21), these innovations will have to be something like alchemy to make the company worth its sticker price. For comparison, Google trades at a forward P/E ratio of 12.

(click here to continue reading The Facebook Fallacy – Technology Review.)

Live to Ride
Live to Ride

Facebook may have demographic information on 800,000,000 people, more or less, with more of less accuracy1, but what are they going to be able to do with this data? Currently, Facebook ads are so poorly targeted as to be a joke. I just looked at my profile, and see seven ads, only one of which is even mildly targeted to me2. The others are Dell ads3, luxury clothing ads, credit card ads, and some GMO tea in a plastic bottle. No wonder that GM decided to spend their money elsewhere. They weren’t the first to notice abysmal performance with Facebook ads. I’d be hard pressed to advise an advertiser to spend money on Facebook when there are so many better options.

General Motors Co said on Tuesday it will stop advertising on Facebook, even as the social networking website prepares to go public.

While GM gave no specific reason for dropping Facebook ads, a source familiar with the automaker’s plans said the company’s marketing executives decided Facebook’s ads had little impact on consumers.

(click here to continue reading GM to drop Facebook ads due to low consumer impact | Reuters.)

If I was a broker, I wouldn’t own Facebook stock for long.

Footnotes:
  1. for instance, I have lots of erroneous information in my profile, just on principle []
  2. some sort of hot sauce []
  3. plural!! even though one of the only things in my FB profile is a love of Macs! []

Written by Seth Anderson

May 22nd, 2012 at 2:55 pm

Posted in Advertising,Business

Tagged with ,

Bank of America Attempts to Repair Image

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Bank of America - Kodachrome
Bank of America – Kodachrome

It will not be an easy task to rehabilitate Bank of America’s image. Skank of America, as some call it, is a particularly juicy target for the Occupy Movement folks, with good reason.

Bank of America has shifted brand advertising duties to a WPP team from Omnicom Group’s BBDO, according to two executives familiar with the matter.

The selection of WPP comes after a process that the bank, under its CMO Anne Finucane, began in January. WPP will now be responsible for the rollout of a new strategic positioning — or what Bank of America was internally calling the development of a “North Star” that would signal to Wall Street and consumers that it’s a new day at the bank, helping to repair the company’s tarnished image.

The agency change will likely lead to BofA shedding its current “Bank of Opportunity” slogan, which was developed by BBDO. The tag was adopted a few years ago to replace the prior “Higher Standards” campaign, but it lost resonance amid a recession that tightened consumers’ purse strings and crippled many small businesses across America.

WPP’s Brand Union was already assigned to Bank of America, so the holding company secures an even larger place on the bank’s roster with this win. Interpublic Group of Cos.’ Hill Holliday, which has handled marketing duties for the bank’s wealth management and corporate social-responsibility operations, among other things, is expected to retain its work. Those agencies either could not be immediately reached or referred calls to Bank of America, which did not return a request for comment by press time.

It’s unclear what the moves mean for Bank of America’s PR shop, Weber Shandwick. Media duties and digital were not in play.

According to Ad Age’s DataCenter, BofA is the 17th-largest marketer in the country, with $1.55 billion in ad spending in the U.S. The company’s rethink comes amid widespread mistrust of large financial organizations that manifested in the Occupy Wall Street movement.

(click here to continue reading Bank of America Moves Brand Advertising From BBDO to WPP | Agency News – Advertising Age.)

JP Morgan Chase Bat Signal
JP Morgan Chase Bat Signal

Stunts like these won’t help:

Jamie Dimon, chief executive of JPMorgan Chase and the industry’s regulation-basher in chief, has called for a sit-down next week between the heads of four of the nation’s biggest banks — JPMorgan, Goldman Sachs, Bank of America and Morgan Stanley — and Federal Reserve Governor Daniel Tarullo, the Wall Street Journal is reporting.

The purpose of this friendly get-together will be to express the banks’ displeasure about financial regulation, particularly a Fed plan to limit the banks’ exposure to derivatives tied to the credit of foreign governments and other banks.

According to the WSJ:

bankers will tell regulators that the rule is based on “unrealistic” standards and could foster “potentially destabilizing” market shifts, according to two draft letters reviewed by The Wall Street Journal.

In other words: Nice economy you’ve got there. Shame if anything should happen to it.

(click here to continue reading Bank CEOs To Tell Fed Regulation Is ‘Unrealistic’: Report.)

plus ça change…
plus ça change…

and there was this, as reported by Aaron Krager of Gapers Block:

Under the recent settlement between big banks and multiple state’s Attorney General gives Bank of America a pass in the alleged fraud against homeowners. The Home Affordable Modification Program should help homeowners restructure their loan in order to stay in their houses. But BofA put up roadblocks to prevent many of these according to a lawsuit.

As the bank installed single point of contacts for homeowners, as directed under consent orders with federal regulators in April, Mackler was promoted. As a SPOC, he allegedly escalated homeowners’ concerns up the hierarchy and allegedly learned another BofA employee told at least one homeowner to voluntarily cancel her HAMP request with the promise of a private modification — a violation of HAMP guidelines. The settlement released BofA from this lawsuit and further prevents the American public from learning the depths the banks went to defraud their consumers.

Since the bank bailout by the federal government through the Troubled Asset Relief Program, Bank of America posted $5.5 billion in profits while paying in no taxes. The bank did pay back the $45 billion they received from TARP. Companies are expected to pay a marginal tax rate of 35 percent but have lobbied Congress and state legislatures for favorable tax loopholes that they regularly utilize to their advantage.

From 2008 to 2011 Bank of America spent more than $15.77 million in lobbying expenditures, according to OpenSecrets.org. Portions of the lobbying undoubtedly goes to loosening regulations but the creation and protection of tax loopholes cannot be dismissed.

(click here to continue reading Bank of America Ignores Citizen Tax Enforcers – Gapers Block Mechanics | Chicago.)

Written by Seth Anderson

May 4th, 2012 at 7:28 am

Posted in Advertising,Business

Tagged with ,

MillerCoors Cuts Ties With DraftFCB

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Miller Coors HQ West Loop
Miller Coors HQ West Loop

DraftFCB sure seems to lose a lot of major accounts.

MillerCoors is making major changes to its agency roster, the biggest of which is the brewer’s cutting ties with its longtime lead creative agency, Interpublic Group of Cos.’ DraftFCB. As part of the shift, Publicis Groupe’s Razorfish has lost creative and digital-media duties. Digital and creative for Coors brands will now move to a new multiagency group at WPP. For the Miller Lite brand, the brewer has picked Saatchi & Saatchi as lead creative shop, after giving it a tryout in January. Digitas, however, keeps Miller Lite digital-creative and -media duties.

Andy England “Winning in premium lights [beer] is the centerpiece of our long-term business stragegy, and we’ve determined that some agency changes will give us the best chance to do exactly that,” MillerCoors Exec VP-Chief Marketing Officer Andy England told Ad Age today. “What we are looking for is sustainable, above-the-line excellence with an integrated solution,” including traditional and digital marketing.

The new WPP team will be housed in Chicago (where MillerCoors is headquartered) and draw on talent from JWT, Ogilvy, Y&R and Grey, as well as digital shops.

(click here to continue reading MillerCoors Shakes Up Shops, Cuts Ties With DraftFCB | Agency News – Advertising Age.)

DraftFCB
DraftFCB

Crain’s Chicago adds:

The decision is a major blow for Interpublic Group of Cos.’ DraftFCB, Chicago, which is still working to regain its footing after losing the global SC Johnson account, a relationship that dates back 58-plus years and was one of the agency’s largest accounts. The agency has had Miller Lite since 2009, and its roots on the Coors brand dates back to 1979, when predecessor Foote, Cone, Belding first started working on the brand.

DraftFCB began losing its grip on Lite in January when the brand brought in Saatchi & Saatchi, New York — already a roster agency — to assist on the “Miller Time” campaign that debuted in late March, which is aimed at lifting the nation’s fourth-largest beer from a long-running slump. The loss of Coors Banquet and Coors Light is an especially tough loss for the agency. Each brand has been growing lately. Coors Light passed Budwieser last year as the nation’s second-largest beer thanks in part to its long-running cold-refreshment messaging.

(click here to continue reading MillerCoors shakes up shops, cuts ties with DraftFCB – Marketing/media News – Crain’s Chicago Business.)

Written by Seth Anderson

May 2nd, 2012 at 10:12 am

Posted in Advertising,Business

Tagged with ,

Poverty Pickets Get Paper-Bag Dousing On Madison Avenue – 1966

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Afternoon reading
Afternoon reading

Mad Men finally began Season 5 after a seventeen month hiatus, and opening the first episode was an incident fairly closely based on fact, and resonating with the current Occupy Wall Street movement. From the New York Times Archive, May, 28, 1966:

More than 300 poor people and antipoverty workers picketed the Madison Avenue headquarters of the Office of Economic Opportunity yesterday, demanding more money for city programs, but they received only a pelting by water bombs apparently thrown by irate office workers.

(click here to continue reading Poverty Pickets Get Paper-Bag Dousing On Madison Avenue – POVERTY PICKETS GET A DOUSING – Front Page – NYTimes.com.)

You have to be a subscriber to read the whole article (or be able to go to a library, how quaint). Here’s a few paragraphs I ran OCR1 on:

Shortly after the demonstration began, a series of handprinted signs were taped to the inside of the second-story windows of 285 Madison Avenue, half a block away. The building is occupied almost entirely by the Young & Rubicam advertising agency.

The signs read: “If’ you want money, get yourself a job”; “You voted for Lindsay, see him”; “Support your local police–no review board,” and “Goldwater ’68.”

A container of water was pitched out of one of the windows of the building, splashing two spectators.

Later, two demonstrators were hit by water-filled paper bags thrown from the building. One of the water bombs struck James Hill, 19 years old, of 224 York Street, Brooklyn, who then slipped and fell to the pavement. He was not hurt. The other struck 9-year old Mike Robinson of 777 Fox Street, the Bronx.

Mrs. Esmé Robinson, the boy’s mother, and several other angry women immediately went up to the sixth-floor offices of Young & Rubicam, from which several onlookers said they had seen the water bombs thrown.

But a secretary in the office said:”That’s ridiculous, they didn’t come from this floor. This is the executive floor. That’s utterly ridiculous.”

“Don’t you call us ridiculous. Is this what Madison Avenue represents?” shouted one of the women.

“And they call us savages,” exclaimed Mrs. Vivian Harris, another of the women.

Manager Apologizes

The women were invited to the second floor to meet with Frank Coppola, the Young & Rubicam office manager, who apologized for the incident. He told them:

“We have 1,600 people in this building, and I can’t control all of them. I’ve ordered all the windows closed and I have men patrolling all the floors to make sure this doesn’t happen again.”

Pretty much as portrayed on Mad Men…

New York TImes May 28 1966
New York TImes May, 28, 1966.PNG

Footnotes:
  1. Optical Character Recognition []

Written by Seth Anderson

March 26th, 2012 at 10:24 pm

Posted in Advertising

Tagged with , , ,

FTC Should Pursue Case Against Google

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Electric Eye
Google’s Electric Eye sees all

Google really has lost whatever ethics it may have once had1 and should really have to pay a price for their latest lapse. Especially since Google and the Federal Trade Commission had an arrangement already, and Google violated it within weeks…

The Stanford privacy researcher who first uncovered Google evading the default privacy settings for all users of Apple’s Safari web browser believes that the Federal Trade Commission has a “slam dunk” case that Google violated its privacy agreement with the government.

“The facts in this case are unusually clear cut,” Jonathan Mayer, a grad student in computer science and law and a researcher at the Stanford Law Center for Internet and Society, in a phone interview with TPM.

…Aside from further tarnishing Google’s image in the press and public at a crucial time (the search giant was at the time getting ready to roll out a controversial new privacy policy), the news led many writers, including TPM, to speculate that Google could be found in violation of a privacy settlement it agreed to with the Federal Trade Commission.

The settlement, first struck in October 2011 , was the result of the FTC’s year-long privacy investigation into Google over its failed Google Buzz social network. The FTC concluded that Google had indeed misled users and violated their privacy and subjected Google to 20 years worth of privacy audits and ordered that Google no longer “misrepresent” its privacy settings to users. If Google violates any of the terms of the settlement, the FTC can slap the company with a $16,000 civil fine for every day that the company violated any of the terms.

On Thursday night, The Journal reported that the FTC “is examining whether Google’s actions violated last year’s legal settlement,” and another regulatory body in France (the CNIL) and several states attorneys general were also investigating Google over the practice and could levy fines of their own.

 

(click here to continue reading FTC Has ‘Slam Dunk’ Case Against Google, Privacy Researcher Says | TPM Idea Lab.)

Or Pay The Price
Or Pay The Price

and from the WSJ:

In the U.S., the Federal Trade Commission is examining whether Google’s actions violated last year’s legal settlement with the government in which Google pledged not to “misrepresent” its privacy practices to consumers, according to people familiar with the investigation.

The fine for violating the agreement is $16,000 per violation, per day. Because millions of people were affected, any fine could add up quickly, depending on how it is calculated. The FTC declined to comment.

A group of state attorneys general, including New York’s Eric Schneiderman and Connecticut’s George Jepsen, are also investigating Google’s circumvention of Safari’s privacy settings, according to people familiar with the investigation. State attorneys general can have the ability to levy fines of up to $5,000 per violation.

In Europe, the French Commission Nationale de l’Informatique et des Libertés, or CNIL, has added the Safari circumvention technique to its existing pan-European investigation into Google’s privacy-policy changes, according to a person close to the investigation. The CNIL is the agency that levied a €100,000 ($130,960) fine on Google last year for collecting passwords and other personal information when Google vehicles were gathering information for its Street View map service.

(click here to continue reading Google Faces New Privacy Probes – WSJ.com.)

Google power and deep pockets shouldn’t be enough to evade the law, the FTC should make an example of Google, and really bring the hammer down.

Footnotes:
  1. perhaps it never had ethics and was just better at covering up its questionable decisions. No matter []

Written by Seth Anderson

March 20th, 2012 at 7:56 am

Google Tracked iPhones, Bypassing Apple Browser Privacy Settings

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Ride Smarter
Ride Smarter

Don’t Be Evil is a thing of the past, the new Google is brash in its insistence that consumers are the product. You are their product, to be sold to advertisers. What you want is not important, only your demographic information is, since that is the commodity that makes Google wealthy.

Google Inc. and other advertising companies have been bypassing the privacy settings of millions of people using Apple Inc.’s Web browser on their iPhones and computers—tracking the Web-browsing habits of people who intended for that kind of monitoring to be blocked.

The companies used special computer code that tricks Apple’s Safari Web-browsing software into letting them monitor many users. Safari, the most widely used browser on mobile devices, is designed to block such tracking by default.

Google disabled its code after being contacted by The Wall Street Journal.

WSJ’s Jennifer Valentino-DeVries has details of Google and other advertising companies that were bypassing privacy levels set by users of Apple’s Safari browser on their iPhones. Photos: Getty Images

The Google code was spotted by Stanford researcher Jonathan Mayer and independently confirmed by a technical adviser to the Journal, Ashkan Soltani.

In Google’s case, the findings appeared to contradict some of Google’s own instructions to Safari users on how to avoid tracking. Until recently, one Google site told Safari users they could rely on Safari’s privacy settings to prevent tracking by Google. Google removed that language from the site Tuesday night.

…Google’s privacy practices are under intense scrutiny. Last year, as part of a far-reaching legal settlement with the U.S. Federal Trade Commission the company pledged not to “misrepresent” its privacy practices to consumers. The fine for violating the agreement is $16,000 per violation, per day. The FTC declined to comment on the findings.

(click here to continue reading Google Tracked iPhones, Bypassing Apple Browser Privacy Settings – WSJ.com.)

Utterly embarrassing for Google, and right when the Congress is poised to look at Google’s privacy practices.

For the record, I use Google constantly, have had a Gmail account since it was first offered, use Google Analytics on this site, even have Google ads (if you haven’t blocked them like I have)

The EFF Foundation blogs:

Earlier today, the Wall Street Journal published evidence that Google has been circumventing the privacy settings of Safari and iPhone users, tracking them on non-Google sites despite Apple’s default settings, which were intended to prevent such tracking.

This tracking, discovered by Stanford researcher Jonathan Mayer, was a technical side-effect—probably an unintended side-effect—of a system that Google built to pass social personalization information (like, “your friend Suzy +1′ed this ad about candy”) from the google.com domain to the doubleclick.net domain. Further technical explanation can be found below.

Coming on the heels of Google’s controversial decision to tear down the privacy-protective walls between some of its other services, this is bad news for the company. It’s time for Google to acknowledge that it can do a better job of respecting the privacy of Web users. One way that Google can prove itself as a good actor in the online privacy debate is by providing meaningful ways for users to limit what data Google collects about them. Specifically, it’s time that Google’s third-party web servers start respecting Do Not Track requests, and time for Google to offer a built-in Do Not Track option.

Meanwhile, users who want to be safe against web tracking can’t rely on Safari’s well-intentioned but circumventable protections. Until Do Not Track is more widely respected, users who wish to defend themselves against online tracking should use AdBlock Plus for Firefox or Chrome, or Tracking Protection Lists for Internet Explorer.1 AdBlock needs to be used with EasyPrivacy and EasyList in order to offer maximal protection.

(click here to continue reading Google Circumvents Safari Privacy Protections – This is Why We Need Do Not Track | Electronic Frontier Foundation.)

Written by Seth Anderson

February 17th, 2012 at 9:48 am