Digitalme does little for privacy - yet

Entering the nascent consumer profiling market, network software maker Novell Inc. launched its Digitalme identity management service at Internet World in New York Tuesday.

Entering the nascent consumer profiling market, network software maker Novell Inc. launched its Digitalme identity management service at Internet World in New York Tuesday.

Novell's (Nasdaq:NOVL) Digitalme purports to let users take control of their information, or profiles.

"Digitalme is ushering in the next wave, where simplicity is paramount and the consumer is in control of his or her personal information," said Eric Schmidt, chairman of the board and CEO of Novell, said in a statement.

But privacy advocates charge that Novell's digitalme makes it easier for businesses to access up-to-date information on their users.

"It's a market-driven decision, but it's not really good for the consumer," said Jason Catlett, president of privacy information firm Junkbusters Corp. "What they are saying is 'give us your information now, and we'll give you privacy later.' "

A Novell official acknowledged the privacy issues, but said that it would be difficult to create business interest in the product if it started out with stringent privacy rules.

"It is sort of a chicken and the egg thing," said Carrie Oakes, chief of staff for Novell's Internet services group. "We have to get a lot of partners to use this" before being able to enforce privacy rules.

Novell thinks that e-commerce sites want consumer information, and if the service doesn't offer it, companies won't sign up with it. Eventually, Novell will offer digitalme logo certification for companies that abide by privacy rules.

Digitalme details
Right now, Novell is counting on convenience to outweigh privacy concerns and attract consumers. The service allows consumers to sign onto their various Web accounts with a single password, automatically fill in online forms and keep site information in a personal Web address book.

Intel Corp. (Nasdaq:INTC), Compaq Computer Corp. (NYSE:CPQ) and others announced their support for the new service.

Profiling the technology
So-called profiling technology has been in the works for years. More than two years ago, sixty major companies banded together to push the development of the so-called Open Profiling Standard -- proposed to the World Wide Web Consortium much later as the Platform for Privacy Preferences, or P3P.

Last year, Microsoft bought profiling technology maker Firefly Networks Inc. to gain access to the technology. Already, Microsoft has automatically enrolled users of its subsidiary Hotmail service into the service, known as Passport.

To date, only Microsoft Network sites can accept the data. As described on Hotmail: "If you sign in to Hotmail or any other MSN site, you are automatically signed in to all MSN sites that use Passport. As you move from site to site, you'll instantly be recognized, and you'll have access to the best features the sites have to offer."

Big Brother in a box?
Both Microsoft and Novell's planned services put all user information in a single place, and that's a problem, said Austin Hill, president and CEO of privacy network Zero Knowledge Systems Inc., a potential rival to both corporations.

"Whether it is a hacker or a civil subpoena, anyone who wants to access your information has a one-stop shop," said Hill. Zero Knowledge has created a beta version of an encrypted network that hides its users' identities. The network does not require the user to trust the company and lets each user store their own data. In addition, Hill thinks consumer information should not be collected in a single database.

Such a storehouse of information is called an infomediary in industry parlance, and it puts consumers in the position of trusting a company with their information.

"What Novell was trying to do is find some happy medium that allows some convenience and a degree of user control," said Jim Dempsey, senior staff consul at technology policy lobbyist Center for Democracy and Technology. "So in that sense, they are sensitive to privacy issues."

Dempsey thinks that many more pieces to the privacy puzzle exist.

"Growing consumer concern about privacy on the Internet and growing corporate interest in meeting consumers privacy concerns will drive the issue," he said. "There is no silver bullet. The ultimate solution will be a mix of technology, self-regulation and government rulings."