Start-ups offer deals for data
NEW YORK — As concern increases about the amount of private data online, and as big sites like Facebook draw criticism that they collect consumers’ information in a stealthy manner, many Web start-ups are pursuing a more reciprocal approach, saying, in essence: Give us your data and get something in return.
The budgeting site Mint.com, for example, displays discount offers from cable companies or banks to users who reveal financial data. The clothing retailer Bluefly could send offers for sunglasses to consumers who disclose they just bought a swimsuit. And location-based services like Foursquare and Gowalla ask users to volunteer their location in return for discounts on Starbucks coffee.
Influenced by consumers’ willingness to trade data online, the sites are pushing to see how much people will turn over.
“People are a lot more willing to give away a lot of stuff as long as it results in some benefits that they value,’’ said Stephen J. Hoch, a marketing professor at the University of Pennsylvania.
New companies including WeShop, Aprizi, Blippy, and Dopplr are trying to exploit the data people seem so willing to give up. Some are even allowing shoppers to set terms: free shipping, half-price discounts, only fair-trade products. They can also list what they are shopping for and let the retailers fight it out for the right to make a sale.
“The whole privacy debate has grown up around people using your data without your permission,’’ said Antony Lee, chief executive of WeShop. “If you want to use your data to your benefit, that’s for you to do.’’
Sponsors can include their logos and links to their sites. They pay a referral fee if a consumer signs up; offers from nonsponsors are listed, too. Daniel Sjoberg, a 26-year-old Manhattan resident, said he particularly liked how transparent Mint seemed to be. “They put that very clearly for you to see — ‘We think Ally is good for you, and by the way, they’re endorsing us,’ ’’ he said.
Aaron Patzer, who founded Mint in 2007 (the company was acquired by Intuit in 2009 for $170 million), believed that users would give the site private data in return for allowing Mint to analyze their finances to alert them when they had exceeded their budget, or to send them offers from cable companies or banks.
“Most venture capitalists, when I was starting this company, said that no one would trust a start-up with their financial information,’’ said Patzer, now general manager of Intuit’s personal finance group. “In essence, we would data-mine your own data in order to help you.’’
WeShop has built a system that allows people to spread information about their shopping habits. After a consumer gives WeShop access to an e-mail account, the system scans e-mail headers to find electronic receipts, then extracts what was bought and at what price.
All that information is posted to the WeShop site as a kind of in-depth shopping history. A consumer can keep it private, or share some or all data in WeShop networks (using a nickname). That lets users compare prices and post messages.
But the upfront deal making does not quiet all concerns.
“The big problem is that these business models are not very stable. Companies set out privacy policies, consumers disclose data, and then the action begins,’’ said Marc Rotenberg, of the Electronic Privacy Information Center. “The business model changes. The companies simply want the data, and the consumer benefit disappears.’’
