IE8's development created a head-on collision within Microsoft between user privacy rights and online ad sales.
Internet Explorer 8 has been a slow and steady success for Microsoft, helping to move users off the aging IE6 and revive browser market share recently after consistently losing share each month to Firefox and other rivals.
What has set IE8 apart from previous versions is its security and privacy features, as well as features like faster startup times and a backward compatibility button. It also hasn’t hurt that Microsoft’s fastest-selling OS ever, Windows 7, comes with IE8.
But the road to IE8 was rife with intense debate within Microsoft, according to a thought-provoking investigative piece in the Wall Street Journal. The dispute centered on how to protect users’ privacy in the browser and simultaneously track user data to sell more online ads.
This contradiction is at the heart of browser security and online advertising these days: How do you keep user data private and yet allow tracking tools and cookies to collect data about users?
You could argue that consumer protection must always come first, until you realize how powerful, sophisticated and necessary online advertising has become. It’s so powerful that Microsoft was willing to spend $6 billion in 2007 to acquire Web-ad company aQuantive to help sell online ads. Google, which is the Internet’s biggest seller of online ads, forked over $3 billion in 2008 for DoubleClick, a company that places and tracks online ads.
Microsoft, in a sense, has one foot on each side of the law, both protecting users’ privacy and tracking their activity. A WSJ examination of the top 50 most popular U.S. Web sites showed that “Microsoft placed third-party tracking devices on 27 of the top 46 sites that it doesn’t itself own.”
The development of IE8 broke Microsoft into two camps, according to the WSJ article. The advocates of user privacy were the designers and planners of IE8. On the other side were Microsoft’s advertising executives led by senior VP and former CEO of aQuantive Brian McAndrews, who argued aggressively that IE8’s privacy settings, more specifically a plan to block the tracking of user activity, could disrupt the selling of Web ads by Microsoft and other companies.
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The IE group, headed by Microsoft veteran Dean Hachamovitch, allegedly resisted suggestions from the ad group and moved forward with a plan to “block any third-party content that turned up on more than 10 visited Web sites, figuring that anything so pervasive was likely to be a tracking tool,” according to the WSJ story.
McAndrews, according to the story, was not happy with this plan, arguing that the IE group’s blocking technology would limit the amount of data collected about users and thereby undermine the potential revenue gleaned from online advertising.
The situation reportedly became so heated that CEO Steve Ballmer assigned two of his top executives to step in and mediate the conflict.
In the end, the advertising execs appear to have won out, even though McAndrews eventually left Microsoft. IE8 ended up being designed so that users must manually turn on a privacy setting called InPrivate Filtering (located under the Safety tab) that blocks user activity tracking, and they must do it every time they open the IE browser. The thinking was that automatic blocking would make it harder for Microsoft to sell ads, according to the WSJ story.
Microsoft would not comment on
the internal disputes over IE8’s privacy settings or whether privacy settings will be tweaked or enhanced in the upcoming IE9, other than to say that “the privacy and security investments made in IE8 will continue in IE9.”
In a company blog post, IE head Dean Hachamovitch shares his thoughts on online privacy, tracking tools and IE8’s privacy settings.
Not surprisingly, there’s no mention of any showdowns with advertising execs on the road to IE8 in Hachamovitch’s post, but the WSJ piece illuminates just how technically and economically complex modern day browser building has become.
What’s your take? Did advertising opportunities win out over user privacy in the development of IE8?
Shane O’Neill is a senior writer at CIO.com. Follow him on Twitter at twitter.com/smoneill. Follow everything from CIO.com on Twitter at twitter.com/CIOonline.
