DoubleClick Merger Good News For Privacy Advocates?
NetCreations, Inc. was founded in 1995 by current CEO Rosalind Resnick
and CTO Ryan Scott Druckenmiller. Ms Resnick was one of the early celebrities
of the Internet revolution. A business journalist who began covering the
Internet from its inception as a commercial concept, she founded the NetGirl
Forum on America Online, which during her tenure in 1995 and 1996 was
one of the most successful areas on AOL. Ms Resnick and Mr. Scott built
one area of their original NetCreations business - the Postmaster website,
an opt-in mailing list for webmasters - into the core of a profitable
marketing business with 1999 revenues of $20 million (up 508% over 1998)
and net income of $4.5 million.
NetCreations business, PostMasterDirect.com, is a double opt-in e-mail
marketing service. Visitors to the site select categories in which they
are interested in receiving marketing e-mail. However they are not entered
into the database until they have replied to an automatically generated
e-mail from the site. The two actions required by the user are the reason
the service is called "double opt-in." NetCreations brings more than 15
million double opt-in addresses to the merger. There are also approximately
7 million single opt-in messages in DoubleClick's databases.
important aspect of NetCreations' privacy policies is that they never
rent out their lists of names. They perform all mailings for their customers,
who therefore only become aware of individuals when those individuals
choose to respond to a mailing. Furthermore, NetCreations keeps no information
about individuals that can reasonably be used to identify them; the only
information is the e-mail address and the list of categories about which
the user wishes to receive e-mail.
that DoubleClick has received quite a bit of flak for its privacy policies
Takes Bath, Throws in Towel) one of the first questions asked about
the merger involved its privacy implications. Here the early indications
are that the news is good for consumers. NetCreations assured TEC that
a fundamental piece of the agreement is that the two companies' e-mail
databases will be kept separate. The DoubleClick policy will be that publishers
will choose between using single and double opt-in lists, and that it
will always be made clear to consumers which kind of list they are signing
up for. NetCreations states that while they were leading the development
of industry best practices for e-mail marketing they came to recognize
that not all legitimate marketing applications are consistent with the
double opt-in approach. For this reason they support the continuance of
the single opt-in list so long as it remains separate from the double
opt-in list and both publishers and consumers understand which list they
will be involved with.
Resnick will become Vice President for Corporate Development of DoubleClick
and will be responsible for all corporate development involving e-mail
marketing. She will also become a member of DoubleClick's Privacy Advisory
Board where she can be expected to add credibility to both the company's
public image and the implementation of consumer-friendly privacy policies.
This merger adds a missing component to DoubleClick's offerings. Its chief
competitor, Engage Technologies owns the competing double opt-in service
YesMail.com. DoubleClick also benefits, in our opinion, from the reputation
and abilities of Rosalind Resnick, especially with respect to the privacy
gains the backing of the largest and most successful marketing firm on
the Web. In particular, it will gain immediate access to the international
market. Already about 10% of the e-mail addresses it controls are from
outside North America, but up to now it has had no international sales
presence. DoubleClick maintains more than thirty offices around the world
and will provide a tremendous boost to NetCreations' global presence.
The question for the IT executive is whether working with DoubleClick
or NetCreations makes technical sense for the company. With respect to
this news you're likely to be asked about whether your company could get
into trouble with bad publicity as a result of working with DoubleClick
or NetCreations. If anything, TEC believes that this merger will improve
DoubleClick's privacy policies and track record.
course, DoubleClick is a whale and NetCreations a minnow, so that if the
corporation doesn't take its representations to Ms Resnick or her advice
seriously, there would be plenty of ways for it to get into trouble with
privacy advocates. For example, it must be tempting to consider using
the category information that NetCreations has as a way to target advertising.
However, that would be nearly impossible under the spirit of the agreement,
as we understand it. It will be DoubleClick's willingness to avoid this
kind of merging of information assets that will demonstrate how serious
the company is about privacy. But so long as Ms Resnick and her team are
there to stand up for the spirit of NetCreations, we expect that the whale
will end up moving aside for the minnow.