DoubleClick Appoints NYC Commish as Window Dressing

In an effort to patch up its tattered reputation in the wake of its recent online invasion-of-privacy fiasco, controversial Internet advertising giant DoubleClick (Nasdaq: DCLK) announced today that two high-profile New York consumer advocates will now lead its privacy efforts.

Jules Polonetsky, who was named New York City Consumer Affairs Commissioner by Mayor Rudlph Guiliani, will be DoubleClick’s new chief privacy officer. Polonetsky served three years as a member of the New York State Assembly before he became the city’s head of consumer affairs.

DoubleClick also announced that former New York Attorney General Bob Abrams will serve as the chair of its Privacy Advisory Board. A former Bronx Borough president and member of the state assembly, Abrams is currently a partner in a New York law firm.

A Commitment to Privacy?

DoubleClick President Kevin Ryan said the appointments further demonstrate the company’s commitment to user privacy. DoubleClick announced last week that the company would not link its “pseudonymous” database of Internet browser surfing profiles with a database collected by subsidiary Abacus Direct Corp. that includes names and addresses and purchasing information gathered from catalog companies.

The database is used to target banner advertising to Internet users as they surf the Net, while the catalog-related database is sold to direct marketers to help target which consumers should receive which catalogs.

May Have Gone Too Far

While DoubleClick’s actions have received widespread praise, many privacy advocates are still concerned that DoubleClick has gone too far. Such groups as the Center for Democracy and Technology have monitored the company’s privacy policies since it bought offline direct marketing company Abacus Direct for $1.7 billion (US$) last year.

That acquisition fueled fears that DoubleClick would combine online surfing habits with personal information culled from Abacus’ records — fears which turned out to be well-founded.

DoubleClick could pay a steep price for its blunder, which sparked new rounds of debate about whether government intervention will be necessary to implement uniform Internet privacy standards. The company is the subject of several class action lawsuits and investigations by both the Federal Trade Commission (FTC) and the New York State Attorney General’s office.

Michigan Action Most Serious

The state of Michigan is also threatening to sue DoubleClick if it does not stop placing its cookies on consumers’ computers without permission. Of all of DoubleClick’s troubles, many analysts believe that Michigan’s action is potentially the most serious.

Michigan recently issued a statement saying that while it applauded DoubleClick’s decision not to link its anonymous information to specific names and addresses, it “reserved judgment” as to whether DoubleClick “has truly committed itself to protecting the privacy of Internet users” because it has not changed its cookie policy.

Michigan said it has a meeting set up with DoubleClick on its threatened lawsuit.

If Michigan succeeds in its suit, it could derail DoubleClick’s fundamental strategy of tracking users on the Internet without their permission. In the process, Michigan would establish a precedent that consumers have the right to control information about their behavior on the Internet.

DoubleClick’s share price rose nearly eight percent to $104 this morning in early trading. The company’s share price dropped to nearly $80 after the privacy issue surfaced in the mainstream press. It reached a high of $135 earlier in the year.