Jul 182010
The Adventures of Tom Sawyer (musical)
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LIFE, as they say, imitates art. And the way things work commercially today across much of the Web recalls that chapter in “The Adventures of Tom Sawyer” where Tom cajoles his guileless friends into whitewashing Aunt Polly’s fence. They supply the labor, but he gets the reward.

On the Internet, users supply the raw material that helps generate billions of dollars a year in online advertising revenue. Search requests, individual profiles on social networks, Web browsing habits, posted pictures and many Internet messages are all mined to serve up targeted online ads.

All of this personal information turns out to be extremely valuable, collectively. So why should Google, Yahoo, Facebook and other ad businesses get all the rewards?

That is the question that animates Bynamite, a start-up company based in San Francisco. “There should be an economic opportunity on the consumer side,” said Ginsu Yoon, a co-founder of the company. “Nearly all the investment and technology is on the advertising side.”

Bynamite, to be sure, is another entry in the emerging market for online privacy products. The business interest in such products, of course, is being fed by worries about how much personal information marketers collect. Also playing a part are recent outcries after Facebook changed its privacy practices and Google introduced a social networking tool, Buzz, that initially shared information widely without users’ permission. Venture capital has been pouring into Web-based monitoring and privacy protection products like ReputationDefender and Abine, as well as services that help parents protect children’s privacy online, like SafetyWeb and SocialShield.

Bynamite brings a somewhat different perspective to the privacy market. “Our view is that it’s not about privacy protection but about giving users control over this valuable resource — their information,” Mr. Yoon said.

Both the protection and the value approaches to the privacy market could well pay off, says Randy Komisar, a partner at Kleiner Perkins Caufield & Byers, the venture capital firm. “What’s intriguing about Bynamite,” he said, “is its emphasis on privacy as revolving around choice and ownership of data, and ultimately a notion of an exchange of value.” (Kleiner Perkins is an investor in ReputationDefender but not in Bynamite.)

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