Saturday, August 19, 2006
FTC asked to Investigate AOL
In separate filings, the Electronic Frontier Foundation and the World Privacy Forum have asked the Federal Trade Commission to investigate AOL's release earlier this month of search term queries that had been made by 650,000 of its users over a three-month period. "This release was a violation of section 5 of The FTC Act," Pam Dixon, president of the World Privacy Forum, said. AOL has apologized for the release of this data on its public research page, explaining that the data had been posted unintentionally. While the search terms were not correlated to specific names or user IDs, many of them did reveal enough personal data to make identification easy. Also, AOL organized the search terms using the same numeric ID for each request a particular user made. Both the EFF and World Privacy Forum say that AOL's actions were a violation of its privacy policy -- and was cause for an investigation by the FTC. AOL has responded that while the release was a violation of internal policies, it did not violate the privacy policy provided to its members. The organizations have also asked that AOL notify users of the query release who can be identified through their search requests, and provide them with credit monitoring insurance for a year. Andrew Weinstein, a spokesperson for AOL, said that AOL is unable to contact the users who may have been impacted by this issue. "We have no way of telling which accounts were included in the data," he said in an e-mail statement. "We cannot unscramble, or decode, which identifier is attached to which account, and thus we have no way of knowing which accounts were involved."
The World Privacy Forum maintains in its filing to the FTC that AOL has released users' search data before, when similar data was provided to the Illinois Institute of Technology in 2004.
It is not surprising to find a research organization in possession of such data. Indeed, AOL and other search engine providers have disclosed their practices of providing search query data to research organizations like the Illinois Institute of Technology in their privacy policies. However, the World Privacy Forum's filing indicates that this data is available simply upon request.
It is unclear from the IIT's Web page what guidance or controls have been established to ensure that its data is released only to researchers, and not the general public. According to the IIT's Web page, the data at the heart of the World Privacy Forum suit consists of 20,000 Web queries randomly sampled from AOL Search data. The WPF's Dixon said the group has not requested this information and is unsure whether it is organized the same way it was in AOL's more recent query data release. AOL declined to comment on this aspect of the filing to the FTC. The IIT did not respond to a request for comment in time for publication, and an e-mail sent to an address included in the World Privacy Forum's court filing also went unanswered.
Brough to you by Guardian eCommerce Privacy Seal Program.
The World Privacy Forum maintains in its filing to the FTC that AOL has released users' search data before, when similar data was provided to the Illinois Institute of Technology in 2004.
It is not surprising to find a research organization in possession of such data. Indeed, AOL and other search engine providers have disclosed their practices of providing search query data to research organizations like the Illinois Institute of Technology in their privacy policies. However, the World Privacy Forum's filing indicates that this data is available simply upon request.
It is unclear from the IIT's Web page what guidance or controls have been established to ensure that its data is released only to researchers, and not the general public. According to the IIT's Web page, the data at the heart of the World Privacy Forum suit consists of 20,000 Web queries randomly sampled from AOL Search data. The WPF's Dixon said the group has not requested this information and is unsure whether it is organized the same way it was in AOL's more recent query data release. AOL declined to comment on this aspect of the filing to the FTC. The IIT did not respond to a request for comment in time for publication, and an e-mail sent to an address included in the World Privacy Forum's court filing also went unanswered.
Brough to you by Guardian eCommerce Privacy Seal Program.
Sunday, August 06, 2006
Can a Small Biz Make It Online?
Small businesses have their share of difficulties, but do they have any chance of succeeding in a world dominated by eBay, Amazon and the like? The short answer is yes -- if they combine the right mix of technology, marketing and customer service. "The goliaths of the online world are everywhere. The biggest struggle young companies face when bringing their business online is getting noticed," Chris Hall, marketing programs strategist and tactician for Chris Hall Marketing, said. Nana Bonsra, CEO and cofounder of Priceshoppe.com, can back up that statement firsthand. Her consumer electronics, computer software and hardware company started out as a brick-and-mortar store in a small town outside of Charlotte, N.C., but she soon realized the competition was too fierce -- especially with a Wal-Mart and BestBuy located in the neighborhood.
The company was doing poorly, so she decided to relaunch it as an online-only retailer, investing about US$100,000 in inventory, technology and infrastructure. Since the site's debut in April 2006, Priceshoppe.com's 15 employees have served more than 1.6 million customers with 8,000 SKUs. The business will generate roughly $2 million in sales by the end of the year, Bonsra estimates; she plans to take the company public in fall of 2008.
"Some of the biggest challenges were getting the right technology at the right prices and finding a team of individuals who believed that we could make any money in such a crowded space," Bonsra said. "We are a pure-play entity, so we have to be able to deliver information to our customers in a timely fashion, and the ability to do that depends on a state-of-the-art technological infrastructure." Building a Web site is undoubtedly a huge hurdle to overcome, but tools like eBay's ProStores help alleviate this problem somewhat. Other areas of concern include buying and housing the inventory, managing the fulfillment and customer service, and driving customers to the site. "Paid search or SEO is really the most effective way, but those are difficult and expensive," she said. Limited marketing budgets are to blame for most of the challenges small businesses face when deciding to go online, acknowledged Sonal Gandhi, SMB marketing analyst at JupiterResearch. That said, several companies now cater to the online marketing needs of small businesses.
"These companies offer services as diverse as business listings on online directory services, such as MerchantCircle, to Web-hosting services combined with search engine marketing, and analytics such as Affinity," Gandhi said. "Growing competition in this area is making online marketing more affordable and accessible for small businesses." Some of the more sophisticated Web hosting and e-commerce packages already come with basic analytics, Gandhi said, and if companies want more than the basics, vendors like Visistat cater to the SMB market.
Sometimes the best way for a small company to go is to offer a niche product. Companies like golfballs.com, batteries.com and neeps.com (the ferret store) are good examples of success stories, according to Mulpuru. Creating community sites by incorporating blogs, message boards and wikis is also an effective strategy, she said, as long as the person in charge is passionate about the topic. Once established, it makes sense to invest in at least a basic analytics package and understand conversion rates, which pages are the most popular, and what products are the best-sellers, Mulpuru said. "Then companies can look to big competitors for where to expand to next, and which customer-friendly features it may make sense to integrate next." Deciding which payment options to accept also presents a challenge, Ed Kountz, senior analyst for payments at JupiterResearch, told the E-commerce Times. Smaller merchants must consider the costs of accepting e-payments online and the number of options they need to accept to best target customer needs. "Merchants should go where the dollars are, and that means start out with credit and debit and PayPal, then move to prepaid/gift and arguably deferred cardless billing [like] BillMeLater," he said.
As they become immersed in all of the technological research, SMBs must not lose sight of the basics, however. "We have invested a substantial amount of financial resources in our marketing initiatives and this gets us noticed on the Web, but at the end of the day we are able to turn lookers into buyers through aggressive pricing, and buyers into customers by offering . . . great customer service," Bonsra said of Priceshoppe.com's success. Whenever a customer encounters a shipping problem, the company assigns the case to one of its sales representatives, who gives the customer a cell phone number where they can be reached and periodically checks on the customer until the case is resolved. For customers who are more comfortable online than on the phone, Priceshoppe offers a live chat option, an increasingly important component of customer service. The bottom line is that companies cannot grow without maintaining positive customer relationships. "Most small companies overlook the most important growth dependency -- customer input," Hall said. "Rather than commission ongoing and professional solicitations, most executives in these companies will presume they know what their customers want. On the contrary, only with continuous customer feedback and insight surveys can a company extend their services [to meet] their customers' needs," she concluded.
Brought to you by Guardian eCommerce Privacy Seal Program.
The company was doing poorly, so she decided to relaunch it as an online-only retailer, investing about US$100,000 in inventory, technology and infrastructure. Since the site's debut in April 2006, Priceshoppe.com's 15 employees have served more than 1.6 million customers with 8,000 SKUs. The business will generate roughly $2 million in sales by the end of the year, Bonsra estimates; she plans to take the company public in fall of 2008.
"Some of the biggest challenges were getting the right technology at the right prices and finding a team of individuals who believed that we could make any money in such a crowded space," Bonsra said. "We are a pure-play entity, so we have to be able to deliver information to our customers in a timely fashion, and the ability to do that depends on a state-of-the-art technological infrastructure." Building a Web site is undoubtedly a huge hurdle to overcome, but tools like eBay's ProStores help alleviate this problem somewhat. Other areas of concern include buying and housing the inventory, managing the fulfillment and customer service, and driving customers to the site. "Paid search or SEO is really the most effective way, but those are difficult and expensive," she said. Limited marketing budgets are to blame for most of the challenges small businesses face when deciding to go online, acknowledged Sonal Gandhi, SMB marketing analyst at JupiterResearch. That said, several companies now cater to the online marketing needs of small businesses.
"These companies offer services as diverse as business listings on online directory services, such as MerchantCircle, to Web-hosting services combined with search engine marketing, and analytics such as Affinity," Gandhi said. "Growing competition in this area is making online marketing more affordable and accessible for small businesses." Some of the more sophisticated Web hosting and e-commerce packages already come with basic analytics, Gandhi said, and if companies want more than the basics, vendors like Visistat cater to the SMB market.
Sometimes the best way for a small company to go is to offer a niche product. Companies like golfballs.com, batteries.com and neeps.com (the ferret store) are good examples of success stories, according to Mulpuru. Creating community sites by incorporating blogs, message boards and wikis is also an effective strategy, she said, as long as the person in charge is passionate about the topic. Once established, it makes sense to invest in at least a basic analytics package and understand conversion rates, which pages are the most popular, and what products are the best-sellers, Mulpuru said. "Then companies can look to big competitors for where to expand to next, and which customer-friendly features it may make sense to integrate next." Deciding which payment options to accept also presents a challenge, Ed Kountz, senior analyst for payments at JupiterResearch, told the E-commerce Times. Smaller merchants must consider the costs of accepting e-payments online and the number of options they need to accept to best target customer needs. "Merchants should go where the dollars are, and that means start out with credit and debit and PayPal, then move to prepaid/gift and arguably deferred cardless billing [like] BillMeLater," he said.
As they become immersed in all of the technological research, SMBs must not lose sight of the basics, however. "We have invested a substantial amount of financial resources in our marketing initiatives and this gets us noticed on the Web, but at the end of the day we are able to turn lookers into buyers through aggressive pricing, and buyers into customers by offering . . . great customer service," Bonsra said of Priceshoppe.com's success. Whenever a customer encounters a shipping problem, the company assigns the case to one of its sales representatives, who gives the customer a cell phone number where they can be reached and periodically checks on the customer until the case is resolved. For customers who are more comfortable online than on the phone, Priceshoppe offers a live chat option, an increasingly important component of customer service. The bottom line is that companies cannot grow without maintaining positive customer relationships. "Most small companies overlook the most important growth dependency -- customer input," Hall said. "Rather than commission ongoing and professional solicitations, most executives in these companies will presume they know what their customers want. On the contrary, only with continuous customer feedback and insight surveys can a company extend their services [to meet] their customers' needs," she concluded.
Brought to you by Guardian eCommerce Privacy Seal Program.
Starting Over When Your Business Fails
GO Corporation was touted as a company that would usher in the next generation of computing by replacing the keyboard with a pen-like device. The Silicon Valley-based startup raised around US$50 million in venture capital before tanking in the early 1990s. Co-founder Jerry Kaplan made no secret of its demise, chronicling it in the book Startup. Then, instead of retiring from entrepreneurship, Kaplan went on to found the successful Web retailer Onsale.com, which merged with Egghead.com, whose annual revenues peaked at $541 million in 1999 before it failed. His most recent venture is Winster, an online gaming outfit. Kaplan, who is chief executive officer, has raised around $1.5 million for it. Did you know that one-third of all new businesses fail by the two-year mark, and almost 60 percent fold within four years, according to a 2005 Monthly Labor Review study. But resilience can be rewarded. So can keeping a positive perspective. Investors, especially venture capitalists, will fund entrepreneurs who have failed before, but not those who burn bridges and lash out at others when they fail, says Kaplan. He is successful today in part because he managed to separate his identity from his business. "The business failed, not me," says Kaplan.
Kaplan is just one contemporary example of a failure-turned-success story. History is filled with them. Lewis Tappan, founder of Tappan's Mercantile Agency, the precursor to business credit reporting agency Dun & Bradstreet, failed as a silk merchant before going on to invent one of the most pervasive systems of measuring business potential in existence. Today Tappan is known as the father of the credit-rating system. A number of U.S. Presidents watched their small businesses fail before arriving at the White House. When Abraham Lincoln was 23, the Illinois retail store he was running went bankrupt, and his next store followed suit. Harry Truman's haberdashery store in Missouri went bankrupt after World War I. As President, he was still writing checks and sending them to his creditors from 20 years before. Other renowned world-beaters have failed businesses in their personal histories. Bill Gates' first business, Traf-O-Data, which he started with Microsoft co-founder Paul Allen to analyze automobile traffic flow, was a flop.
Today's entrepreneurs could stand to learn a few things from these resilient souls, says Scott Sandage, professor of history at Carnegie Mellon University and author of Born Losers. "It used to be that we as Americans thought of failure in business as something that happened when we were overzealous in expansion, when we went too far too quickly, or tried to expand into a business that we didn't know enough about," says Sandage. Now, failure indicates you're an overall washout and is used as a catchphrase to describe laziness or someone without ambition. "We're so attuned to the possibilities of success that we don't have a vocabulary for talking about failure," says Sandage. "That's why we have catch-all words like loser," he says. What marks those who bounce back is a balance of optimism and pessimism -- the ability to confront what went wrong honestly but not lose self-confidence. Failing doesn't automatically make you a loser, but that's something many people have to be taught.
To help businesspeople become more resilient, Andrew Shatte, vice-president of research and development for Adaptiv Learning, an executive coaching firm that conducts resilience training for Fortune 500 companies, teaches a technique he calls "causal analysis." "It's the ability to sit down and work out exactly what caused the failure and make sure you don't repeat the same mistakes," he says. Overly optimistic people tend to blame failure on temporary factors and overlook the root causes, while pessimists give up too easily, thinking that there is something intrinsically wrong with them or their approach, says Shatte. What's important, he says, is striking a balance.
Brought to you by the Guardian eCommerce Privacy Seal Program, increase online sales, get the privacy seal.
Kaplan is just one contemporary example of a failure-turned-success story. History is filled with them. Lewis Tappan, founder of Tappan's Mercantile Agency, the precursor to business credit reporting agency Dun & Bradstreet, failed as a silk merchant before going on to invent one of the most pervasive systems of measuring business potential in existence. Today Tappan is known as the father of the credit-rating system. A number of U.S. Presidents watched their small businesses fail before arriving at the White House. When Abraham Lincoln was 23, the Illinois retail store he was running went bankrupt, and his next store followed suit. Harry Truman's haberdashery store in Missouri went bankrupt after World War I. As President, he was still writing checks and sending them to his creditors from 20 years before. Other renowned world-beaters have failed businesses in their personal histories. Bill Gates' first business, Traf-O-Data, which he started with Microsoft co-founder Paul Allen to analyze automobile traffic flow, was a flop.
Today's entrepreneurs could stand to learn a few things from these resilient souls, says Scott Sandage, professor of history at Carnegie Mellon University and author of Born Losers. "It used to be that we as Americans thought of failure in business as something that happened when we were overzealous in expansion, when we went too far too quickly, or tried to expand into a business that we didn't know enough about," says Sandage. Now, failure indicates you're an overall washout and is used as a catchphrase to describe laziness or someone without ambition. "We're so attuned to the possibilities of success that we don't have a vocabulary for talking about failure," says Sandage. "That's why we have catch-all words like loser," he says. What marks those who bounce back is a balance of optimism and pessimism -- the ability to confront what went wrong honestly but not lose self-confidence. Failing doesn't automatically make you a loser, but that's something many people have to be taught.
To help businesspeople become more resilient, Andrew Shatte, vice-president of research and development for Adaptiv Learning, an executive coaching firm that conducts resilience training for Fortune 500 companies, teaches a technique he calls "causal analysis." "It's the ability to sit down and work out exactly what caused the failure and make sure you don't repeat the same mistakes," he says. Overly optimistic people tend to blame failure on temporary factors and overlook the root causes, while pessimists give up too easily, thinking that there is something intrinsically wrong with them or their approach, says Shatte. What's important, he says, is striking a balance.
Brought to you by the Guardian eCommerce Privacy Seal Program, increase online sales, get the privacy seal.
