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Internet start-ups offer bargains in return for users’ private data

Internet start-ups offer bargains in return for users’ private data
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First Published: Mon, May 31 2010. 09 15 PM IST

Data trade: Aaron Patzer. The New York Times
Data trade: Aaron Patzer. The New York Times
Updated: Mon, May 31 2010. 09 15 PM IST
As concern increases in Washington about the amount of private data online, and as big sites like Facebook draw criticism that they collect consumers’ information in a stealthy manner, many Web start-ups are pursuing a more reciprocal approach—saying, in essence: Give us your data and get something in return.
The budgeting website Mint.com, for example, displays discount offers from cable companies or banks to users who reveal their personal financial data, including bank and credit card information.
These early efforts are predicated on a shift in the relationship between consumer and company. Influenced by consumers’ willingness to trade data online, the sites are pushing to see how much information people will turn over.
Data trade: Aaron Patzer. The New York Times
New companies including WeShop, Aprizi, Blippy and Dopplr are trying to exploit the data that people seem so willing to give up. Some are even allowing shoppers to set what terms they want—free shipping, half-price discounts, only fair-trade products. They can also list what they are shopping for, like a gray cashmere sweater under $100, for instance, and let the retailers fight it out for the right to make a sale.
Daniel Sjoberg, a 26-year-old in Manhattan, signed up for Mint as he was completing graduate school in biostatistics last summer. He allowed the site to pull information from his checking account, his credit card and his student loan account.
Aaron Patzer, who founded Mint in 2007 (the company was acquired by Intuit in 2009 for $170 million), believed that users would give the site private information in return for allowing Mint to analyze their finances to alert them when they had exceeded their budget, or to send them offers from cable firms or banks.
While data on Mint is kept private—there is no way to share financial details with other users—WeShop has built a system that allows people to spread information about their shopping habits. After a consumer gives WeShop access to an email account, the system scans email headers to find electronic receipts, then extracts what someone bought and what price they paid.
All that information is posted to the WeShop site as a kind of in-depth shopping history. A consumer can keep it private, or share some or all purchase data with other people in WeShop networks (using a nickname).
Giff Constable, co-founder of Aprizi, a shopping start-up that asks users to enter information about preferences, then selects products for them from throughout the Web, said a changing business model was unlikely, and even if it happened, the consumer could easily disengage.
“It’s a very simple bargain—it’s, ‘You share with me, and I am going to make your life better,’ ” he said. “It’s not about privacy versus lack of privacy—it really does come down to control and giving people choice.”
That, and a perceived benefit. “I wasn’t really concerned about giving them information,” said Sjoberg, the Mint user, “I was only considering the things I was getting out of it.”
©2010/The New York Times
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First Published: Mon, May 31 2010. 09 15 PM IST
More Topics: Internet | Web | Online | Private Data | Corporate News |