The Emeryville, Calif.-based company, which launched its free service last year, said the high cost of bandwidth and a lack of ad-related profits contributed to the closure. The company posted a notice on its Web site last week saying that it has suspended the free service.
"For the time being, we are turning off our free consumer service," the notice said. "In the future, we may relaunch the service on a subscription basis."
The shutdown underscores the difficulties software companies have faced in catering to consumers interested in increased privacy. A year ago, these companies were showing off their wares, promising people that they would be protected from the tracking capabilities of employers, online marketers, Web sites and the government.
That road, however, has been a bumpy one, especially for companies trying to attract paying subscribers. Security software maker Zero-Knowledge Systems signed up more than 70,000 people to a free version of its Freedom Network, which enabled people to scan the Web and send e-mail using pseudonyms. But it shut down the service in October after failing to sign up enough paying members for a premium version. The company said it will focus on its security software for home users.
SafeWeb, which was founded last year, will head down a similar path toward the security market. The company hit the privacy market first because it was "hot, very intriguing and very exciting," said company spokeswoman Sandra Song. But SafeWeb needs to become profitable, so it's shifting its energy toward developing security technology. Its product, the SafeWeb Secure Extranet Appliance, is a box that administrators can install on corporate networks to help protect company data.
Several problems contributed to the shutdown, including a bankruptcy filing by SafeWeb's Internet service provider, the notice on SafeWeb's site said. Although SafeWeb rerouted its traffic, the secondary server became overloaded, leading to disruptions.
"We haven't decided whether or not to stay in this consumer space because we're moving into the enterprise security market," Song said. The free privacy service "is an idealistic endeavor; it's not profit motivated...It's more like fulfilling a vision to protect people's privacy to get around government censorship, open the channel for communications, promote democracy and free speech," she said.