NebuAd first casualty of online privacy backlash
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US-- Behavioural targeting firm NebuAd has closed down – the first high-profile casualty of the online privacy backlash.
On Friday, the company's board of directors executed an “assignment for the benefit of creditors” – transferring its assets to an entity that will pay off its creditors.
NebuAd's system of serving adverts to web users based on their browsing history sparked complaints from consumer groups, who feared that the information gathered for targeting purposes could be used to identify individuals.
Congressional hearings were held and politicians threatened new laws – all of which served to scare off internet service providers from adopting the technology, despite having tested it.
Privacy fears forced NebuAd to shelve its behavioural advertising system in September last year, but soon after it was sued by customers of those ISPs that had trialled the technology, who claimed that their online activity had been monitored without their consent.
Court documents related to that case reveal that NebuAd had been winding down its affairs since late summer of 2008, having laid off “substantially all of its officers and employees in July/August 2008 and closed its office in Redwood City on or about 25 September 2008”.
Lawyers for the plaintiffs wrote in a letter to Judge Edward Chen on Sunday that NebuAd's counsel had informed them “that NebuAd will ‘imminently' assign all its assets as an assignment for the benefit of creditors”.
“NebuAd will, at that point, cease to exist as an ongoing concern,” the lawyers wrote. “From a company that once employed over 60 people, NebuAd now operates with a skeleton staff, and shortly, that too will disappear.”
Author: Brian Tarran
