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Senate Grills 'Wiretapping' Ad Firm

The U.S. government has never seemed sure whether it views data collection by online advertisers as a healthy business driver for the Internet, or a looming privacy threat needing regulation. But despite hauling Web ad giants like Google, Microsoft, and Facebook before a Senate Commerce Committee hearing Wednesday, the Senator chairing the hearing seemed to have only made up his mind about one lesser-known online ad firm: Redwood, Calif.-based NebuAd.

In the first minute of questioning, Senator Byron Dorgan D-N.D., immediately took issue with NebuAd's controversial new approach to targeting ads: The small firm, founded in 2006, partners with Internet service providers (ISPs) to track all of a user's activities on the Web and feeds parts of that information to its advertising network.

Tapping ISP data holds the promise of a lucrative new method for making Web ads more effective. But Dorgan seemed less than pleased with the prospect. "The stories I've seen say that Internet service providers allow NebuAd to come in, and when anyone does anything on [their] system, [they] shovel all the information over to you," Dorgan said. "Isn't that just wiretapping?"

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