Ad targeting based on ISP tracking now in doubt

A slow-building privacy storm moved in on NebuAd Inc., the Silicon Valley startup that can facilitate the Web tracking. And its potential partners, the Internet service providers, failed to make the case that they should be in the ad business at all, rather than simply being the pipes that pass Internet traffic back and forth.

One by one, cable and telephone companies that had conducted trials using NebuAd's ad-serving system have indefinitely suspended expansion plans. In interviews, executives at the Internet access providers blamed an unfavorable climate as Congress considers tightening federal oversight.

"A bunch of them have dropped (NebuAd) like hot potatoes," said Gigi Sohn, president of the advocacy group Public Knowledge.

Annmarie Sartor, a spokeswoman for broadband provider CenturyTel Inc., said the company was ready to proceed until "Congress started questioning privacy."

"We were going to launch this summer," she said. "The trial from our viewpoint was successful."

Bresnan Communications LLC, The Washington Post Co.'s Cable One Inc. and Knology Inc. also have ended trials without immediate plans to move forward, joining the previously disclosed suspensions by Embarq Corp. and WideOpenWest. Charter Communications Inc. dropped plans for a summer pilot because of the scrutiny.

Although NebuAd claimed late last year that Internet providers representing millions of customers run NebuAd's system, it's unclear how many, if any, partners remain.

NebuAd, whose chief executive, Bob Dykes, freely spoke with The Associated Press about its plans several months ago, declined comment for this story. Spokeswoman Janet McGraw said via e-mail, "We do not have any specific business updates at this point."

Across the Atlantic, a similar company called Phorm Inc. has also faced complaints since its February announcement of partnerships with three access providers reaching 70 percent of Britain's broadband market--BT Group PLC, Virgin Media Inc. and Carphone Warehouse Group PLC's TalkTalk.