Advertisers win one in debate over `cookies'

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A move by Netscape Communications Corp. may settle a major debate between online advertisers and Internet privacy advocates over the use of the Web personalization tool known as "cookies."

Netscape said the next version of the Netscape Navigator browser will still accept all types of cookies, enabling ad management companies, ad networks and publishers to continue using them to deliver targeted ads and content to Net users.

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A proposal by the Internet Engineering Task Force, an Internet standards group, had asked browser marketers to set up their software to automatically reject cookies coming from third-party Web sites.

The proposal would have severely damage the business model of ad management companies that depend on cookies to deliver targeted ads. Publishers that use cookies to aid in personalization or to track visitors at their sites would also have been adversely affected.

"We are not planning on making any changes at all to the basic function of Navigator with regard to cookies," Lou Montulli, protocols manager at Netscape, told Advertising Age. "We simply will be adding the ability for the users to make changes to cookie acceptance policies, if they wish."

In the current version of the browser, users can manually change their "cookie preferences" to show an alert when a site tries to deliver a cookie. Mr. Montulli said the next version, Navigator 4.0, will offer the ability to reject all cookies outright as well as reject only certain types of cookies.


But because the vast majority of Web users never bother to change their cookie preferences, the effect on companies that use cookies as targeting tools will be minimal.

Netscape's decision will certainly relieve the online advertising community, which has been in a panic since news of the year-and-a-half-old standards proposal started spreading this spring (AA, March 31).

The proposal, widely known by its ID number RFC 2109, would have had a "terrible" effect on the business of ad serving company MatchLogic, said Russ Yanda, senior VP for global business development. The company allows advertisers to centralize distribution of advertisements to sites across the Net.

Like many other companies that use cookies, MatchLogic employs them to control how many times ads are shown to any individual, as well as for other personalization purposes.

Netscape's decision not to fully support RFC 2109 is somewhat of a surprise: Mr. Montulli was one of the proposal's original authors. But he claimed the point about third-party cookies was added by the drafting committee against his wishes.

"I think we're doing the right thing for the users. But it's a very fine line," Mr. Montulli said. "If we were to unilaterally disable this feature, existing content on the Web would no longer work . . . [Also,] sites that use [cookies] tend to use them in a way that generates revenue. If you take away revenue from the sites, then the users may lose their ability to go to these sites."


Netscape's rejection doesn't kill the IETF's proposal, but it does knock the wind out of it.

Although IETF suggests standards, it does not enforce them, and Netscape's majority market share often dictates the de facto standard for the greater market.

Netscape currently has about a 70% share of the browser market.

Microsoft Corp., the other leading browser marketer, could not be reached for comment on the IETF's proposed standard, but in March, Paul Balle, product manager for the Internet Explorer, indicated Microsoft was inclined to adopt some of RFC 2109's recommendations.

Netscape's decision may make moot two initiatives from the ad community to mount a fight against the cookies standard. The Internet Advertising Bureau has just started to survey its members for their opinions on cookies.

Dan Jaye, chief technology officer of Engage Technologies, meanwhile, has spearheaded a proposed amendment to RFC 2109 that last week was scheduled to go before the IETF. That amendment was designed to mitigate the current draft's damage to advertisers.

What's in a cookie?
"Magic cookies," as Netscape first called them, are small files that Web publishers can save onto visitors' computers.

Sites can use cookies to control how often an ad is shown to individual users, to target advertising and to customize content.

What's the fuss all about?
Contrary to popular belief, only the site that placed the cookie on a user's hard drive can access that information, when cookies are used properly. But some say a "hole" in the design of cookies could let rogue publishers collect personal data that users shared with other sites.

Also, some privacy advocates believe that any surreptitious file that publishers slip to users without their knowledge is upsetting.

What's a "third-party" cookie?
Third-party cookies are sent to a user from a domain other than the site the user visited.

An ad network could serve a cookie to a user along with an ad when the user visits one of the sites in the ad network. The network could then reference the visitor's same cookie data when it serves him or her an ad on another site in the network. Privacy advocates find this objectionable.

Copyright May 1997, Crain Communications Inc.

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