Privacy Software, Marketing Patents Signal DM World's Complex Future

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PrivaSeek, Broomfield, CO, released its Persona Valet identity management software last week, which shuttles pre-screened personal information between opt-in consumers and prospecting direct marketers via the Web.

At the core of Privaseek's business model is the notion that consumers will soon be authorizing their transactions and data exchanges brokered by companies like PrivaSeek and marketing partners working with them will have access to more qualified customer prospects.

At the same time, Broadpoint Communications, New York, an Internet and technology services company announced it had received a patent for its new proprietary communications solution which enables marketers to target customers with extremely precise, highly individualized communications via telecommunications networks.

The two company's coinciding announcements highlight the complexity of the privacy debate. In the case of Privaseek, an entire business model has been created that seeks to leverage society's concern by creating an ostensibly less hostile environment for everyone. According to Privaseek CEO Larry Lozon, "The Persona Valet gives all of us as consumers control over our personal information and makes it possible for businesses to provide us with information and offers that are relevant to our wants and needs when and where we want it."

But at BroadPoint, CEO Perry Kamel said, "Delivering individualized content in a large-scale environment is a formidable challenge. Doing so cost-effectively is virtually impossible without adopting key elements of our proprietary designs and methods." BroadPoint said its patented technologies permit innovations like the free long distance service FreeWaySM, to become truly viable options for consumers as well as direct marketers. FreeWaySM provides callers with cost-free long distance telephone calls in exchange for listening and interacting with targeted messages delivered by phone.

Both BroadPoint's patented technology and Privaseek's branded Persona Valet seek to take advantage of new trends in verifiable permission-based marketing and one-on-one communications between consumers and advertisers. But some see more hype than substance and point to shortcomings in arenas that often get left unaddressed by marketers.

For instance, The Health Privacy Project of Georgetown University recently completed analysis of state privacy statutes in relation to medical records. The report concluded most state health statutes are no longer compatible with the technology now being used by the healthcare industry -- an area soon fall onto the radar screens of infomediary companies and one already being monitored by consumer advocacy groups .

In a published report, Janlori Goldman, director of the Health Privacy Project said her organization's analysis was the first to delineate the ways states regulate the confidentiality of healthcare industry records specifically. She said, [the report] shows tremendous unevenness, inconsistency, confusion and lack of coherence across states in their protection of basic privacy principles." But the report stopped short of calling for a federal preemption of state laws.

However people like Marc Rotenberg, executive director for the Electronic Privacy Information Center in Washington are still worried. Rotenberg has routinely warned consumers that they have little control over their privacy, and that bigger problems loom in areas where the confidentiality of personal information is. He also said infomediaries are not managing privacy "they are brokering consumer data" under a privacy banner.

PrivaSeek said its product allows businesses and consumers to negotiate based on qualifying criteria that has been predetermined to be beneficial to both parties.

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