Small Sites Raise Funds Via Amazon Honor System

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Amazon.com launched its Honor System this month as a way for Web users to make donations to participating sites while putting a little money in Amazon's pocket.


"It's becoming extremely clear that many great, high-quality Web sites need to develop new sources of revenue," said Alan Caplan, vice president of payment services at Amazon.com, Seattle. "For many sites advertising really doesn't make it as the sole revenue model."


In response, Amazon devised the Honor System as a way for small Web sites that lack the capability to accept payments to get support from their users.


The Honor System is a fee-per-transaction model. Amazon gets 15 cents plus 15 percent of each transaction it processes for member sites. Donations must be from $1 to $50, a range set by Amazon.


The premise for the system is that consumers will pay for good content and the sites they use regularly.


Though hard evidence is difficult to come by, the preliminary success for some participants is encouraging. Honor System affiliate SETI (Search for Extraterrestrial Intelligence) Institute, for example, raised more than $600 in its first week.


"SETI has a secure payment site for memberships, but because it's a small organization, it would be difficult to manage a lot of small donations, which can easily be taken care of by Amazon," said Greg Klerkx, director of development at SETI Institute, Mountain View, CA. "We realize that there are probably a lot of visitors to our site who might be interested in helping out but might not be quite prepared to join up as members, and the Amazon Honor System is a great way to reach out to those people."


Though at least one privacy advocate has praised the concept of the Honor System, there has been concern regarding its tracking capabilities.


"I don't have any objection at all to the idea of a payment system or marketing it as a donation to small Web sites," said Jason Catlett, president of privacy group Junkbusters Corp., Green Brook, NJ. "It's the way they chose to implement it by serving it from their own servers that raises a very pervasive privacy question."


Catlett contends that by setting up the payment box from Amazon's servers, the company has the ability to track visitors on each participating Honor System site.


Amazon claims it has set up the system to disable such tracking possibilities.


"We took specific measures so that we would not be able to [track users] because we know that would not be appropriate," Caplan said.


Still, that policy could change at any time, Catlett said.


"When they approached me, the first thing I asked about was the privacy policy," said Andrew Marlatt, who is with SatireWire, Branford, CT.


Satisfied with Amazon's explanation and pledge that it will not track users, Marlatt signed on as a member. However, if Amazon changed the policy, Marlatt said, he would reconsider participation.
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