SAN FRANCISCO (03/08/2000) - It's something of a Faustian bargain: Buy at a discount, sell your privacy. Sign up for Dash.com and get bargains on everything from cookbooks to dress shirts at more than 100 Internet retailers.
In return, agree to let Dash track your every move on the Internet.
For many, it's no trade-off at all. Since Dash launched four months ago, 200,000 people have signed up to use the Microsoft Explorer version; 300,000 more have asked for the AOL-Netscape-compatible version, expected to be released soon. "The bargains have been excellent," says Bob Friedman, the mental health commissioner for Westchester, N.Y., and a Dash user.
Friedman's wife heard about Dash from a friend. "For retailers that were highly known to us and that we trusted, we got extra values," he adds. Friedman is Dash.com's dream customer. He's upper middle class, he uses the Internet to manage his finances and to shop, and he says he's completely comfortable giving up information about his buying patterns.
Here's how Dash works: You sign up and download the Dash "viewbar," which stays active as long as you browse the Internet, unless it's manually turned off.
While it's on, the viewbar records every Web site you visit and sends that information back to the company computer. There, a program runs your activity against a list of sites and search terms laid out by Dash's merchant partners and, when a match occurs, Dash sends you a discount offer.
So if you're searching for a copy of, say, Goethe's Faust, Dash senses your interest in books and offers you a bargain from Barnesandnoble.com, one of its partners. If an offer results in a sale, the partner pays Dash a commission and Dash cuts the consumer a check for up to 25 percent of the purchase price, depending on the commission negotiated with the merchant.
Other Dash partners include Jcrew.com, CDnow and Dell. The names and addresses of users who get rebate checks are stored in the same database that holds their Web-activity files. Dash lets users go into their personal files and delete some or all of the sites they've visited, but Dash CEO Dan Kaufman estimates less than 5 percent have ever done so. Users can also ask to have part or all their rebate donated to one of the five charities affiliated with Dash.
Not that it bothers them when they find out. "I've got nothing to hide," says 60-year-old retiree and Dash junkie Chris Pitti, acknowledging that she didn't know the company was keeping a record of her online habits. (Dash does show its customers a multipage disclosure document when they sign up. How many of them read it - and understand it - is another question.) Privacy advocates generally applaud the idea of giving consumers access to and control of their information. But they point out that consumers' rights don't stop there. "It's good to have a great policy in place but that's half of the equation," says Tara Lemmey, president of the Electronic Frontier Foundation, a civil liberties group. "When the users are signing up for the system or downloading the software, that's when it's really important for them to understand that this is tracking."
Soon, Dash will be analyzing users' data and building profiles based on Web activity - inferring, for instance, that an individual is a man between the ages of 25 and 30 who has a dog and is looking for a job. Dash plans to start selling those profiles to advertisers and other direct marketers - in anonymous aggregate form - in the second or third quarter, Kaufman says.
Omnicom Group, an advertising holding company, is one company looking to benefit from the information Dash gathers; it bought a 20 percent stake in Dash in December for $25 million. Other marketing dot-coms are involved in similar schemes. AllAdvantage pays registered users 50 cents an hour to run highly targeted ads at the bottom of their screens. MyPoints has coaxed some 6 million participants to accept targeted ads by awarding them credits they can use to bid on prizes auctioned by affiliated online businesses. Both companies collect information on users' viewing habits, interests and response to ads and use the aggregated data to sell more ads.
They may have hit upon a winning equation for collecting the online data that so many marketers crave these days. Sure, money can't buy happiness. But for Dash it's buying the next-best thing: customer satisfaction.