Who will pay for privacy?

Private firms as search for ways to provide privacy for profit             Back to NCPA Debate Home Page

Paying for Privacy: Market could be huge but customers are a tough sell November 24, 2000 This article by Deborah Lohse of the Mercury News reviews the efforts of privacy firms Privada Inc., Zero-Knowledge Systems, iPrivacy to develop privacy products that consumers will pay for. The article was reported on the MacWeek.com site under its Quicklinks: Dozens of companies see a potentially lucrative business offering online privacy-protection services for consumers, but so far the gains have yet to materialize, reports Deborah Lohse of the San Jose Mercury News. "While the market could indeed be as big as the $50 billion predicted by industry leader Zero-Knowledge Systems, already a handful of companies have gone under or changed their business models after trying in vain to get consumers to pay for privacy," she writes. "The hurdles are many. Consumers profess great concern over privacy but have only nebulous understanding of the risks and little inclination to change their online behavior. Giants like Symantec, Microsoft and Netscape are incorporating privacy elements into their products, including 'cookie managers' coming in the next versions of browsers. And companies need a lot of capital to keep up with rapidly changing technology." --- The article cites an IDC study on what it would take for customers to reveal information they wanted to keep private. The number one response was "a $100 gift-certificate" and the number two response was "a $50 gift certificate." So if people are willing to exchange information they say they would like to keep private for $100 or $50, this suggests they are not willin to pay very much, or to go to much trouble, to keep this information private in the first place.