Call me a cynic, but of course Google disavows deep-packet inspection, the ad-targeting technology that NebuAd’s become the poster child / whipping boy for. Google’s search engine plus network of AdSense-using sites practically give it the same data, so why should they bother?
I’m personally getting a little weary of the Kabuki dance between Congress and the internet giants. Congress has decided that some legislation is necessary to protect consumer privacy, the major players are all trying to attempting to throw the technology they’re weak at or don’t need under the bus, and anything that’s potentially on the ‘destroy all value through government interference’ list is getting slightly bigger opt-outs slapped on it as a defensive maneuver. It might not be right, but the Yahoos and AOLs of the world have (probably correctly) determined that the percentage of the population that cares about ad targeting is miniscule and that this sort of sacrifice might very well preserve the whole. The ‘gnawing off your foot to escape a trap’ strategy isn’t pretty, but it might just be their best option.
Since we already know exactly how this works out — some minor bit of ad targeting technology is going to become opt-in, a few startups specializing in that area will get royally screwed, a few politicians will pad their resumes, and for the rest of the world, life will go on — I wish they’d just put all the options on a board, throw a dart at it, and be done with it.
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I’d be a bit more concerned about some of the other data Google has access to, and I heard rumors of them building or considering building data products around, the data from Google Desktop. They have insights into what people are looking for on their machine, what applications they have installed, in conjunction with browsing habits etc.
Also history shows that regulators usually have some getting-a-clue issues; that being said, self-regulation has been a fairly miserable failure as well. It’s a bit of a crapshoot.