Microsoft Corp. is sticking with a decision to make it harder to track users’ online behavior, earning plaudits from privacy groups while drawing fire from the advertisers its money-losing Web unit needs most.
After months of criticism that the new tools cut off valuable customer-targeting information, the software maker has no plans to change the automatic setting in its newest Internet Explorer browser that tells websites not to track user behavior, General Counsel Brad Smith said.
“We crossed the Rubicon and are completely comfortable being on other side of the river,” he said. “We have no intention of going back and have no intention of engaging in discussion on that possibility.”
The so-called Do Not Track feature has been at the center of privacy debates over browsing data and how websites and marketers use it to make money. For Microsoft and the advertisers, at stake is a $31.7 billion U.S. Internet ad market that grew 22 percent in 2011, according to the Interactive Advertising Bureau, much of it generated by ads tailored to user behavior.
Now Microsoft, whose banner advertising business was already losing market share to Facebook Inc. and Google Inc., is being criticized by trade groups and facing opposition from advertisers and even partners like Yahoo! Inc., who say they will ignore privacy signals transmitted by Internet Explorer 10.
“Advertisers have invested a lot in their ad platforms, and the Achilles’ heel is the consumers aren’t aware that their data is being bought and sold,” said Anthony Mullen, an analyst at Forrester Research. “That being exposed, which is what this Microsoft initiative does, is healthy, but I can see why the ad industry is nervous.”
Microsoft wants to engage in talks with advertisers and standards bodies to assuage some concerns, Smith said.
In May, Microsoft surprised privacy advocates and some of its own managers by saying its Internet Explorer 10 browser, the version included in the new Windows 8, would automatically turn on a signal that tells advertisers not to follow user behavior. Other browsers, by contrast, have the Do Not Track signal turned off and give users the option to turn it on. In Explorer, users can choose to change the setting to “off” to enable tracking.
Association of National Advertisers CEO Bob Liodice said his group opposes the decision to turn on the signal.