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March 28, 2006

What’s Your Privacy Worth? [8:01 am]

Increasingly, it depends on what you mean by “privacy.” Unfortunately, the definition seems to be more than a little mutable: E-Commerce Report: Pssst! You Can Get It Cheaper Over There

IT’S the kind of thing that can make bargain hunters rejoice: merchants that follow consumers to competing stores and show them a better deal just as they are about to check out. In the mall, that would be considered stalking. Online, it’s an idea that has been around for several years but has failed to catch on.

Now Barry Diller’s company, IAC/InterActiveCorp, among several others, is giving this kind of shopping software a revival. The company recently introduced Pronto, a software application that a user downloads at Pronto.com. Once a user clicks on one of the 50,000 merchants in its database, Pronto silently monitors all of a user’s activity on a product page, then shows deals from other merchants on the same items, or similar ones, until it finds a better deal. Then it sends a message prompting the user to click away.

[...] Pronto’s software, which works on Windows machines (but not Macs), connects users to Pronto’s database of 50,000 merchants, which it has built by scanning and cataloging retailer’s Web pages. The software is activated when a user clicks on a specific product page on a retailer’s site, then it scrolls a window over the bottom right-hand side of the computer screen with alternative retailers and prices for the same product.

Someone shopping for a Canon PowerShot SD 450 on CompUSA.com, for instance, could be shown a window saying they could save up to 29 percent at other retailers, like Abe’s of Maine or newegg.com. After clicking on that window, a larger page covers most of the screen with details on the other merchants’ offerings and links to those products. For items like teak benches or gas grills, which come in so many variations that apples-to-apples comparisons are difficult, the software will return suggestions of similar products listed by those names. Users may also set up the system so that it alerts them when prices for a particular item fall below a certain threshold.

When someone buys from a merchant that Pronto has suggested, the merchant pays Pronto a commission, typically from 5 to 15 percent of the sale. That’s a different approach from other companies, like WhenU and SmartShopper, which are paid by sites each time someone clicks on their links.

[...] Still, privacy-sensitive shoppers may feel uneasy about installing such software on their computers, since it essentially watches someone’s surfing habits and stores information about them.

WhenU’s software stores that information on the user’s computer, not the company’s servers. Others, like Smartshopper.com, say they track users anonymously, meaning they do not collect personal information. Pronto collects a user’s e-mail address so it can send sale alerts, among other things. Pronto also gives users the option to clear the system’s product history file, in case they are shopping for items they do not want Pronto to keep in its records.

Will merchants will feel comfortable having a service whisk away customers just as they are ready to buy? Executives of the shopping software companies are unapologetic.

“If you’re a merchant and you’re not competitive, you don’t want an educated user, that’s for sure,” said Ziv Eliraz, vice president of strategic alliances for SmartShopper, which is based in New York. Mr. Eliraz added, however, that he had heard no complaints from merchants about his service.

Related: Twilight of Tax Privacy

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