"The Business of Spying on Internet Users"

Tracking technology is becoming more sophisticated and pervasive:

The Web's New Gold Mine: Your Secrets, by Julia Angwin, WSJ: Hidden inside Ashley Hayes-Beaty's computer, a tiny file ... consists of a single code— 4c812db292272995e5416a323e79bd37—that secretly identifies her as a 26-year-old female in Nashville, Tenn. The code knows that her favorite movies include "The Princess Bride," "50 First Dates" and "10 Things I Hate About You." It knows she enjoys the "Sex and the City" series. It knows she browses entertainment news and likes to take quizzes. ... Ms. Hayes-Beaty said when told what that snippet of code reveals about her. "The profile is eerily correct." ...

One of the fastest-growing businesses on the Internet, a Wall Street Journal investigation has found, is the business of spying on Internet users. The Journal conducted a comprehensive study...

• The study found that the nation's 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning. A dozen sites each installed more than a hundred. The nonprofit Wikipedia installed none.

• Tracking technology is getting smarter and more intrusive. Monitoring used to be limited mainly to "cookie" files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. Some tools surreptitiously re-spawn themselves even after users try to delete them.

• These profiles of individuals, constantly refreshed, are bought and sold on stock-market-like exchanges that have sprung up in the past 18 months.

The new technologies are transforming the Internet economy. Advertisers once primarily bought ads on specific Web pages—a car ad on a car site. Now, advertisers are paying a premium to follow people around the Internet, wherever they go, with highly specific marketing messages. ... "It is a sea change in the way the industry works," says Omar Tawakol, CEO of BlueKai. "Advertisers want to buy access to people, not Web pages." ...

The top venue for such technology, the Journal found, was ... Dictionary.com. A visit to the online dictionary site resulted in 234 files or programs being downloaded onto the Journal's test computer, 223 of which were from companies that track Web users. ...

The information that companies gather is anonymous, in the sense that Internet users are identified by a number assigned to their computer, not by a specific person's name.  ...

Targeted ads command a premium. Last year, the average cost of a targeted ad was $4.12 per thousand viewers, compared with $1.98 per thousand viewers for an untargeted ad ...

Wittingly or not, people pay a price in reduced privacy for the information and services they receive online. ... Dictionary.com executives say the trade-off is fair for their users, who get free access to its dictionary and thesaurus service. "Whether it's one or 10 cookies, it doesn't have any impact on the customer experience, and we disclose we do it," says Dictionary.com spokesman Nicholas Graham. "So what's the beef?"

The problem, say some industry veterans, is that so much consumer data is now up for sale, and there are no legal limits on how that data can be used. ...

Media6Degrees Inc., whose technology was found on three sites by the Journal, is pitching banks to use its data to size up consumers based on their social connections. The idea is that the creditworthy tend to hang out with the creditworthy, and deadbeats with deadbeats. "There are applications of this technology that can be very powerful," says Tom Phillips, CEO of Media6Degrees. "Who knows how far we'd take it?"