Lars asks:

> When reading Yahoo's privacy policy pages recently, I noticed
>  something about "web beacons" being used in addition to cookies.
>  This was the first time I encountered the term "web beacons",
>  and I must admit that I did not fully understand their page how
>  web beacons work. Is anybody familiar with this technique (or
>  technology) and willing to shed some light or share a handy URL
>  where I could learn more about those strange little beasts?

From the August 14, 2001 of the NY Times:

========================================

August 14, 2001, Tuesday


TECHNOLOGY; 'Web Bugs' Are Tracking Use of Internet


By JOHN SCHWARTZ
Many people who have personal Web pages are unknowingly tracking people who
visit and sending the information to third parties, according to a new
report.

The report -- which will be released today by Cyveillance, which tracks
Internet sites for corporate clients -- says that the use of an Internet
monitoring technology popularly known as ''Web bugs'' has exploded on
personal Web pages -- especially those created free through online companies
like America Online and Geocities, a company owned by Yahoo. The monitoring
technology, which can be used to gather information on visitors to a Web
site, is invisibly added to the Web pages as part of elements that the sites
offer to help create the Web page.

America Online, for example, encourages users to place an advertisement
offering a free trial membership; the company promises to pay users $50 for
any new America Online member who signs up for the service by clicking on the
ad.

When users place the AOL ad on their pages, they also get a Web bug that
passes information along to Be Free Inc., an Internet market research and
advertising company.

The Web bug technology, which is also known by such terms as ''clear gifs''
and ''Web beacons,'' now appears on 18 percent of personal pages, compared
with less than 4 percent of pages over all and 16 percent of home pages for
major companies. In a similar survey that Cyveillance conducted in 1998,
fewer than 0.5 percent of personal Web pages contained Web bugs.

''The increase was so large on personal pages we went back to check it,
because we thought it must be a mistake,'' said Brian Murray, the author of
the report.

The privacy policy of Yahoo states that the company sometimes uses Web bugs,
but does not say explicitly that it places them on personal pages of its
users. The America Online privacy policy does not describe the use of Web
bugs on personal pages.

Often invisible, Web bugs are generally innocuous: they are often used, for
example, to count visitors to sites or to gather statistical information
about Web sites without collecting any personal information about those
visitors.

Andrew Weinstein, a spokesman for America Online, said that its Web bugs
collect no personally identifiable information on the visitors to personal
pages, and had a single purpose: ''to send checks to people'' whose Web pages
attract new customers to the company.

But privacy advocates find the potential of such bugs alarming. Scott
Charney, an Internet privacy and security expert at PricewaterhouseCoopers,
said that he had seen an early draft of the Cyveillance survey, and that if
Web bugs were in fact being used without consumers' knowledge to gather
information, ''it's extremely troubling -- the technology should not be used
to collect information in such a covert way.''

The use of bugs to track people and to create profiles of them becomes more
powerful -- and, some privacy advocates argue, more problematic -- when the
technology is used by a network of sites linked to some third party.

The bugs are often placed on pages by third parties, like online advertising
agencies, to collect data about visitors to pages of the agencies' clients
and to help the advertising company to determine which banner ads the
visitors should see.

By sharing information among Web bugs across several different sites, the bug
can also be used to track people's movements as they wander across the
Internet. And if the visitor has given personal information to one site, say
by registering for contests or signing a visitor's log, then the information
can be linked to his or her activities on any other site with a Web bug
issued by the same third party.

Cyveillance, which is based in Arlington, Va., conducted the survey, which
included a million Web pages, to determine how prevalent these bugs have
become; since the company works with clients to safeguard their reputations
in the online world, Cyveillance executives said, the survey was intended to
warn companies about the growing controversy surrounding the bugs. The
Cyveillance report did not identify companies that place Web bugs.

The Web site for Be Free, the company that gets a great deal of the America
Online traffic, says it ''sits uniquely in the middle of a valuable data
stream between businesses, their online marketing partners and consumers.''
The company is based in Marlborough, Mass.

Tom Gerace, the company's co-founder, said the company did not collect any
information that could be used to identify consumers personally. He said that
he created Be Free with his brother in 1996 to provide ''flexible, robust
marketing analysis so our customers and their affiliates can become better
marketers over time.''

The monitoring technology, which he says he prefers to refer to as Web
beacons, helps track billions of advertising promotions each month for
companies like America Online, Microsoft and Barnesandnoble.com.

=======================================

Wirt Atmar

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