Whose responsibility is it to protect our online privacy?

The FTC recently released yet another set of rules to regulate online privacy. As new technologies, especially Internet-related ones continue to surface, the different regulatory entities will have to continue developing new laws that are for the most part left in writing. The FTC will continue to create rules and companies will continue to violate them without major consequences for the most part. Of course, I’m not saying rules shouldn’t be created because some sorts of standards need to exist to help us understand “right” from “wrong”. But I do think that it would be best if more browsers took an honest step in favor of their customers by allowing them to truly decide whether they want to be targeted or not.

I said “more browsers” because Microsoft recently took a very important measure in terms of protecting the online privacy of their customers. According to a recent WSJ article, the technology giant decided to add a feature to the next generation of Internet Explorer that allows customer to select privacy settings that stops certain websites and tracking companies from gathering information such as web activity. They have done this despite the possible alienation of advertisers. The great news is that if Microsoft did it, Firefox, Google and others will probably have to follow. Hopefully this will become a requirement on the customer’s part when deciding which browser to use.

Advertisers of course aren’t happy with this measure. However, there could be a positive side for them if their customers are protected: they could be sued less! Of course, that weigh much less than the positives they get from tracking people but at least it is not all bad for them. Just last week, a website called YouPorn was sued for allegedly violating consumer protection laws by using “history sniffling”, which is basically tracking people and trying to tailor products and communication based on whatever they have seen online before (and it is assumed interests them). According to new sites, the porn site was tracking a couple of its users who are now very mad and are seeking unspecified damages through a class action status. If the big browsers had the “no tracking” option in place, YouPorn would not be in the court right now. So in the long run, privacy protection could have a positive side for everyone involved. Hopefully advertisers see the other side of the coin and understand the importance of privacy and that they should only want their customer’s information when their customers are willing to share it with them. In the meantime, it would be great for browsers to follow Microsoft’s lead.

What will the future hold for Groupon?

Groupon has such a simple concept yet so appealing to all of us! Everybody loves discounts and now we can get them online. It really appears to be a win-win situation for everyone. The business only pays for the advertising if they get the business, the customer gets a discount, and Groupon gets a cut if the customer actually goes to the business. Of course, it isn’t that simple and there are a few drawbacks. First, you can’t just download all the coupons at once because they only offer one special per day (a big disadvantage in my opinion) so you have to visit the webpage daily and ideally share it with your friends. Also, in some cases it may be the case that marketers could actually losing money while advertising with Groupon at a very large level, although they might purposefully be doing it to gain awareness. Sam Diaz, editor at ZDNet recently posted a blog comment about how Gap in Chicago most likely lost money in a recent promotional push through Groupon.

Another major drawback (this time for Groupon) is that the concept is extremely easy to copy. Sites like LivingSocial(LS) are rapidly growing and although much smaller in revenue, last August LS got more web traffic than Groupon according to Comscore. Even though Groupon’s concept is easy to copy they have a major advantage that lessens this issue, which is top of mind brand awareness. Since I started thinking about writing this post, I have asked a lot of people where is the best place to find coupons online, and except for one person, they all said Groupon. Then I remembered that the one person who didn’t say Groupon doesn’t live in the US. He mentioned couponidad.com, the Colombian copy of Groupon.

The future of Groupon may seem uncertain to those who think that because the concept is so simple, it can easily be replaced by competitors. Although possible, I think that as long as Groupon keeps innovating and continues to be in the forefront of technology in what it relates to online coupons, they will continue to have the competitive advantage of having entered the market first. Google seems to believe the future of Groupon is promising as they recently offered to buy the company for $5.3 billion (the largest offer by Google ever). It also seems that Groupon think it is worth more and might be thinking of going public according to yesterday’s WSJ article. Only time will tell…