Geographic tracking raises opportunities, fears 
  By Stefanie Olsen
  Staff Writer, CNET News.com
  November 8, 2000, 4:00 a.m. PT 

  New technology that can pinpoint the physical location of Web surfers is creating 
opportunities for online merchants
  and advertisers but could signal new restrictions on the free-wheeling Internet. 

  So-called geotracking techniques that trace Internet Protocol (IP) addresses, which 
are used to route signals over the Web to
  an individuals computer, can help Web sites and advertisers target audiences in 
different geographic regions. For example, a
  traditional retailer such as Banana Republic could hawk swimming suits to Web 
visitors from Los Angeles as it pushes parkas
  to online shoppers from New York. 

                  But if this technology offers greater efficiencies and new 
opportunities for online businesses, bringing
                  physical boundaries into the largely borderless world of cyberspace 
raises several delicate questions.
                  Net users worried about online privacy may balk at technology that 
might one day reveal their street
                  addresses to marketers. But for governments watching their 
sovereignty erode online, the chance to
                  erect virtual walls may be too tempting to pass up. 

                  "If it does become technically feasible to limit access by country, 
than it does seem to take away from
                  the global reach of the Internet," said Andrew Shen, a policy 
analyst at the Electronic Privacy
  Information Center, a privacy research group. 

  Quova, a San Francisco-based Web marketing company, has developed technology to blur 
these lines. 

  The company set out in January to scan the Nets 4.2 billion IP addresses. The 
data-gathering project netted Quova a
  detailed physical map of the Internet. It is using the information to launch a new 
service later this year, dubbed GeoPoint,
  which the company says will target advertising to online audiences based on 
location. 

  "In the offline world, geography is so pervasive depending on what area youre in, it 
determines what products youll sell. Yet
  in the online world theres no element of geography," said Rajat Bhargava, founder of 
Quova, which is backed by Softbank
  and IDG Ventures. 

  With GeoPoint, Quova joins a growing number of Net advertisers that hope to tempt
  marketers with the promise of pinpointing customers who live or work within a 
particular
  country, state, city and even ZIP code. 

  Privacy advocates are looking at the ability of companies such as Quova to trace a 
Net
  user to a physical location. Beyond privacy, however, geotracking raises significant
  regulatory questions for online commerce, taxation, legal jurisdiction, online
  broadcasting rights and a host of other policy issues that have traditionally 
depended on
  borders. 

  Geotracking technologies have largely flown below the radar of regulators, but they 
are
  beginning to draw notice. For example, a technology panel next week is expected to
  issue a report to a French court saying techniques are available for stopping a large
  percentage of Net users in France from using a Yahoo auction site in the United 
States.
  Yahoo has argued that blocking French customers from viewing Nazi paraphernalia
  banned in that country was not feasible on the Web. 

  "Yahoo is basically saying they cant block French visitors from their site. But as 
Quova (and others) show, the majority of the
  time, you can block information coming from geographical areas," said Richard Smith, 
chief technology officer at the Privacy
  Foundation. 

  "Geographic blocking is sort of inevitable...for such instances as blocking online 
casinos and political messages in China.
  How prevalent it will be is the question." 

  Geotracking takes off
  Started late last year, Quova operated for the first nine months of this year as a 
"stealth-mode, Internet infrastructure
  company," a tagline that raised hairs among security types. In mid-September, the 
company launched a beta version of its
  software. The technology lets companies know where Web visitors originate, down to 
their city, so that they can target
  advertising, customize Web pages, and deliver digital media to certain geographic 
locations. 

  A slew of businesses have emerged to offer similar services. Digital Island and 
Digital Envoy
  specialize in location targeting DoubleClick, Engage and 24/7 Media offer targeted 
local
  advertising to its customers. 

  Last month, Microsoft licensed technology, dubbed TraceWare, from Digital Island to 
manage
  the distribution of digital content nationally and internationally. 

  "What we do is make things easier on the Internet," said Sanjay Parekh, chief 
executive of
  Digital Envoy, based in Duluth, Ga. "Our technology is a dumbed-down version of 
caller ID--I
  know where you are, but I cant call you back...Technically it would be difficult to 
tie a persons
  IP address to their home address, and thats not something were going after." 

  Akamai Technologies has had a rudimentary geolocation service in operation since this
  summer, guaranteeing an accuracy rate of about 98 percent in determining the country 
or U.S.
  state where a given Web surfer is located. 

  The company declined to comment directly on Frances order to Yahoo, one of Akamais
  longstanding customers. But vice president of product management John Shumway said 
the
  companys service could help a content provider block surfers in a specific country 
from
  reaching a particular Web service. 

  Akamai is moving ahead with a plan to ratchet up that location service another 
notch. It is
  working with some of its Internet service provider partners and using its own 
sprawling network
  of servers to develop the ability to narrow a surfers location to the level of 
metropolitan area,
  for example. 

  The company is aware that it risks skirting the boundaries of privacy protections 
but says it is
  confident that it is still well on the side of protecting individuals information. 
Allowing
  advertisers or Web companies to streamline their sites for local content could help 
consumers
  as well as the companies themselves, as long as the information exchange stays on a 
fairly
  unspecific level, Shumway said. 

  "Its a very difficult issue with geolocation, figuring out what is proper and what 
in the long run
  might represent some threat to privacy," he said. "But targeting (on a city level) 
isnt
  necessarily a bad thing, any more than its a bad thing to pick up a newspaper and 
see a local
  ad." 

  Can it work?
  Such questions point to another big piece of the puzzle for locator companies, which 
face an
  uphill climb in creating the sales forces needed to sell local advertising online. 
Because there
  are countless businesses on the local level, the sales staff needed to reach them 
all would
  outweigh any benefits reaped from targeted advertising. 

  Local ad spending online is expected to reach $2.7 billion by 2003, taking up $1 in 
every $4
  spent, according to Jupiter Media Metrix, but it wont go up significantly after 
that. 

  "Its going to be a hard sell--its difficult to sell to local advertisers online 
because they dont get
  it. And its hard to sell to national advertisers because theres so much waste," said 
Marissa
  Gluck, advertising analyst for Jupiter Media Metrix, a New York-based research 
company. 

  Beyond the commercial promise of selling local ads globally, geotracking could 
provide
  regulators with a tempting solution to the Nets borderless architecture. 

  "Regulators are going to try to (implement) this," said William Cheswick, a former 
researcher
  with Bell Labs who has worked extensively on Internet mapping projects. "They have an
  enormous motivation to do it." 

  Companies such as Akamai and Quova can help create barriers on the Web for companies
  doing business internationally or nationally. Insurance and financial services 
companies, for
  example, face different laws and regulations by state and country. The Internet 
compounds
  these problems by opening access to anyone with a computer despite their homeland. 

  "This technology will help them comply with some of these regulations. But it will 
be up to the
  courts to decide what level of accuracy they need," Quovas Bhargava said. 

  Some already are putting that theory to the test. 

  Conflict abroad
  One of the most prominent cases of geographic tangles was this years crash and burn 
of iCraveTV.com, a Canadian
  company that had hoped to offer a streaming version of broadcast TV on its Web site. 

  The problem was, iCraveTV didnt ask permission from the TV companies whose content 
it was using. Its Web site ostensibly
  barred Americans from watching the streams, which included several U.S. TV stations. 
But the only real barrier was a page
  asking for a Canadian area code, which served as a password to the entire site. 

  Partly because broadcasters license content and sell advertising on a regional 
basis, this infuriated media companies on
  both sides of the border. A broad coalition of media companies sued iCraveTV, which 
backed down. Since that time, the
  company has been working on a way to determine a viewers location and block U.S. 
residents from watching Canadian
  programming. 

  Whether geotracking can meet the needs of regulators, however, depends on several 
factors, including winning international
  cooperation on assigning IP addresses in a systematic fashion. In addition, serious 
questions remain about how accurate
  geotracking is and if it can meet the demands of regulators and the courts. 

  Technically, Quova gathers infrastructure-level information from several 
public-domain sources without looking at such
  electronic data as email addresses and cookies, or digital tracking tags. 

  "Basically weve collected traceroute and pings to tell us how traffic is moving, 
where traffic is coming from, where its going to,
  what its performance is," Bhargava said. 

  By analyzing the data, the company knows the city location of all IP addresses, or a 
designated market area, based on
  Nielsen/NetRatings standards. Quova wants to target anonymously based on ZIP codes, 
and it is in talks with various
  companies about additional services. 

  There are some major holes in this approach, however. 

  For example, Quova and others do not have a good read on the location of subscribers 
at the worlds largest ISP, America
  Online. The company, with 24 million members, poses a challenge because it uses a 
proxy-serve network that only shows IP
  addresses traveling from its home base in Virginia. For AOL, GeoPoint can only 
identify a person by country, with up to 98
  percent accuracy, Bhargava said. 

  Locator technology is only 60 percent to 70 percent accurate, according to research 
from Jupiter Media Metrix. These
  estimates are based on the large number of IP addresses used by AOL. And as the 
number of AOL customers grows, the
  accuracy rate will shrink. 

  Elsewhere around the world, AOL doesnt operate proxy-serve networks, Bhargava said, 
so the opportunity to determine where
  Web visitors originate from is better. 

  Former Bell Labs researcher Cheswick said geotracking technology may be accurate 
enough for advertising purposes, but it
  does come close to the level required for legal applications such as the Yahoo case. 

  "On the surface, this sort of looks like it works," Cheswick said. "But it gets 
dicey when you try to break it down to a city or even
  if you break it down to a single country...For advertising or marketing purposes, 80 
to 85 percent accuracy is fine. But when it
  come to the courts, you want to have a higher standard." 

    
                  
                                 



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