An Internet start-up wants to sell you the ability to protect your privacy, allowing you to create different online identities for different purposes and cloak your true self from prying eyes.
Early press coverage has been uniformly positive. CNN.com’s review says “Total digital privacy may be on the horizon.” The San Francisco Chronicle’s article is titled “Online disguises from prying eyes.” To BusinessWeek, it’s a “A big boost for Net privacy.”
“Think about how much business is predicated on the flow of personal information!” one of the founders predicts. “If you need to add privacy as a foundation under all of that, what is that industry worth? It’s huge. Billions and billions and billions.”
The year was 2000, and the company was named Zero Knowledge Systems. Even by the standards of that era, it spent staggering sums of money with virtually no sales: ZKS brought in only $400,000 in 2001 in license revenue from its flagship Freedom software, while losing $24 million a year, according to documents filed for its initial public offering. The IPO was canceled two months later, and ZKS abandoned the idea of selling privacy for a profit; under a new name it sells IT services to Internet service providers.
Fast-forward 10 years, and a group of companies including Google, Microsoft, and Intel, along with some government agencies, have declared that January 28, 2010, is officially “Data Privacy Day.” The idea, according to the group’s Web site, is to spur the “development of technology tools to promote individual control over personally identifiable information.”
Which sounds exactly like what ZKS tried, and failed, to convince the public was a good idea. And it’s not just one company: a 2001 article in The Atlantic rattles off a list of companies that were hoping to attract privacy-sensitive Internet users. The list includes IDcide (dead), PrivacyX (defunct), American Express’ Private Payments (ditto), and Disappearing.com (you guessed it).
The Atlantic article mentions ZipLip, founded to protect e-mail privacy; now, under the name ZL Technologies, it offers innovative ways to “find relevant information hidden in massive volumes of data” for legal discovery processes. Anonymizer.com was founded by cypherpunk Lance Cottrell to provide privacy-protective Web surfing to the public for a reasonable fee. It’s now part of Abraxas Corporation, a northern Virginia firm that shares its name with a comic book villain and has close ties to the CIA and FBI. The Electronic Frontier Foundation, which once enthusiastically recommended Anonymizer.com, says it no longer does because of Abraxas’ links to the U.S. national security apparatus.
Neither ZKS nor Cottrell responded to requests for interviews for this article.
The profit motive
Meanwhile, companies accused of invading privacy have prospered. Winning a Big Brother Award from the activists at Privacy International is closely correlated with marketplace success; savvy investors can be excused for cheering whenever a corporation is presented with the prize (which is, in a nod to George Orwell’s famous phrase, a golden boot stomping on a human face).
After Privacy International handed Accenture a “Worst Corporate Invader” award in 2005, its share price has roughly doubled. So has Oracle’s after Larry Ellison was given the sobriquet of “Greatest Corporate Invader.” After activists labeled DoubleClick as uniquely horrible, it was bought by Google for a princely $3.1 billion. And so on.
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