http://online.wsj.com/article/SB10001424052748703296604576005542201534546.html

DECEMBER 7, 2010

Microsoft to Add 'Tracking Protection' to Web Browser

By NICK WINGFIELD And JENNIFER VALENTINO-DEVRIES

Microsoft Corp. says it will revive a powerful privacy feature in Internet Explorer similar to one it dropped from an earlier version of the Web browser because of concerns about alienating advertisers.

The software giant said the next version of its browser, Internet Explorer 9, will allow users to stop certain websites and tracking companies from gathering information about them.

Users will be able to subscribe to something called "tracking protection lists"—lists of the Web addresses used by tracking companies. Internet Explorer would then automatically block those companies from the user's computer.

The Wall Street Journal reported in a front-page article earlier this year that Microsoft removed similar features from Internet Explorer 8 after online advertisers expressed concerns about the impact on their business.

Microsoft's move Tuesday drew applause from regulators and privacy groups, but was criticized by the trade group for the $23 billion online-ad industry which relies on tracking to target ads to people.

The Federal Trade Commission last week released a report calling for a "do not track" system that would allow people to send a message through their Web browsers alerting tracking companies that they don't wish to be tracked.

Microsoft said its coming tool is potentially more powerful than a do-not-track system that relies on companies to comply with a user's request."This path is different in that it actually blocks the tracking now," said Dean Hachamovitch, Microsoft's vice president in charge of Internet Explorer development. He added the two types of blocking could "happily both coexist."

FTC Chairman Jon Leibowitz applauded Microsoft's move and called on other makers of Web browsing software to offer similar features.

"This announcement proves that technology is available to let consumers control tracking," Mr. Leibowitz said. "Now others in both the browser and advertising communities need to step up and develop technologies including implementing a Do-Not-Track option."

Representatives from Google Inc., Firefox maker Mozilla Corp. and Apple Inc. didn't respond to requests for comment.

Advertisers expressed concern that Microsoft's tool would prevent ads and content from being delivered to people using Microsoft's tool.

"We are concerned that the new browser features will block the advertising that supports free content on the Internet, and may inadvertently block news, entertainment and social media content as well," said Randall Rothenberg, chief executive of the Interactive Advertising Bureau.

When asked about the impact of the privacy tool on the advertising industry, Peter Cullen, Microsoft's chief privacy strategist, said the company has "an unwavering commitment to a viable advertising business."

Privacy advocates said advertisers could still show ads that didn't use tracking tools.

Microsoft's feature, called Tracking Protection, is a tool that will allow users to prevent being tracked by small text files called "cookies" and bits of software known as "beacons." It will be included in Internet Explorer 9, which is slated to be released next year.

However, it may not be simple to use. Microsoft isn't going to provide a default list of tracking companies it blocks. Instead users will need to rely on lists compiled by privacy groups and other outsiders.

To use Tracking Protection, a user would need to select a list and turn the feature on. The list would automatically be updated every week. While the feature would be off by default, once a user turned it on, the protection would remain in place.

Microsoft's Mr. Hachamovitch said he expects that the tool will be used by "far far far less than 100 [percent]" of Internet Explorer users.

Two years ago, Microsoft abandoned a set of similar privacy features planned for Internet Explorer 8.

At the time, the development team behind Internet Explorer devised a feature known as InPrivate Filtering that automatically monitored the websites consumers visited, and blocked websites suspected of tracking online consumer behavior.

The team also proposed a feature known as InPrivate Subscriptions that would automatically block Web addresses suspected of consumer tracking if those addresses appeared on "black lists" compiled by privacy groups.

However, Microsoft had just acquired an online advertising firm, aQuantive Inc., for $6 billion. Executives from the advertising group complained to senior executives the features could undermine their ability to target advertising to consumers.

In the end Microsoft, removed InPrivate Subscriptions from Internet Explorer 8. And it required users to turn on InPrivate Filtering every time they started the Web browser to make it work.

Write to Nick Wingfield at nick.wingfield@wsj.com

How It Will Work

* Privacy groups make lists of tracking companies' online addresses
* User clicks on a link to add such a list to Internet Explorer
* Internet Explorer blocks the listed tracking companies from the user's computer
* The list is automatically updated every week and remains in effect even if the user restarts the browser