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James Howard, Part One:
Changing the Face of the Web
interviewed by Randy Williams on June 27, 1996
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"Nothing I could write is going to destroy the Web, but some companies that have based their revenue models on ads may not be around in a year."
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Like what you've read so far? Why not check out Part Two of the
interview and find out how a drama major creates an Internet start-up.
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Are you alarmed by Netscape's ability to track your movements on the Web through the use of "magic cookies"? Are you irritated by advertising on the Internet? If you answered yes, then PrivNet's Internet Fast Forward may be for you. Although still in beta stage, IFF has been incredibly controversial. Tripod caught up with James Howard, the 23-year old CEO of PrivNet and gave him the opportunity to tell his side of the story. This week's installment deals with the ways in which IFF may impact business on the Web.
Tripod: INTERNET FAST FORWARD'S ad blocker seems to have received a great deal of press, but I don't know anyone who is terribly concerned about ads on the Web. Do you think the ad blocker is primarily what interests people in your product?
Howard: Actually, there's a popular radio host who did an interview with us last Sunday, and it was all about the cookie filtering. He barely mentioned the ad blocker, but he was just absolutely alarmist about cookies; he was basically saying that they were the worst thing ever invented by mankind. He said he had more listener response call-ins about the cookies than anything else in the history of his show. He was just a little bit over the edge -- I mean he was going, "How dare these advertisers keep track of me like that!"
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Ever wonder where the term "Magic Cookies" came from? Listen to James Howard's surprising answer in RealAudio! If you haven't downloaded the free Real Audio 2.0 player yet, hurry on over to Progressive Networks and hear what you've been missing.
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Tripod: But is there any evidence that cookies are being used for nefarious purposes?
Howard: Someone gave a great analogy: it's like when you walk into a Barnes & Noble or Borders bookstore, and right when you enter the door, somebody puts a notepad on your back. As you're going around browsing in the bookstore, an employee follows you around writing down, on your back, everything that you browse through -- and when you get to the check-out counter, they pull the thing off your back and they say, "Oh, we see you were looking at erotic literature and Playboy. Would you like a subscription to so and so or could we recommend that you buy such and such?" It personally doesn't bother me that much, but some people out there just virulently don't like it.
Tripod: But turning cookies off completely could be akin to throwing the baby out with the bath water. For example, I like to shop online at Amazon.com books and CDnow -- both of which use a cookie-based "shopping basket" to keep track of my purchases. Does the cookie filter on Fast Forward provide a check-box if the user wants the cookies to process?
Howard: Well, it's hard to block or allow cookies on an individual basis. It's sort of all or nothing. Netscape has given you the ability to do "per call blocking," but not per line blocking. If you click on Netscape's box that says "please notify me whenever cookie is going to be sent," the problem is -- when you go to a homepage like HotWired -- they may only have two cookies, but they'll try to set them about 10 times each. You're going to have to hit cancel about 10 or 20 times on their homepage for no cookies to go through. For some reason, Netscape has not allowed you to just turn them completely off, but Internet Fast Forward lets you do that.
Tripod: Articles have appeared which claim that competing companies are already working on "blocker-breakers" for your IFF ad blocker. Doesn't it seem like Fast Forward could just start a vicious cycle of software companies chasing each other's tails -- and negating each other's progress?
Howard: We've seen plenty of discussions on how to defeat IFF and nobody's worried us yet. They all seem to be going in the wrong direction for some reason. The only ways that it is possible to defeat us are going to clog up the bandwidth and piss off all the users of Netscape to a large extent.
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The ad guys didn't really think their business plans through that well. I guess they weren't expecting anything like this.
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Tripod: But Fast Forward works by storing URL addresses of online ads in a database. Couldn't one of these companies which do nothing but serve ads work around IFF by assigning multiple URLs to ads or dynamically generating different server addresses?
Howard: There's several of those companies popping up -- Double Click and Focal Link, for example. The whole idea behind companies like these is that they have a centralized advertising company which has close reins on how many ads they vend out -- which means that they have to vend them from a central server. They can't vend them from inside, say, Netscape or HotWired. Blocking everything sent out from a central server is the easiest thing in the world to do, so these ad guys didn't really think their business plans through that well. I guess they weren't expecting anything like this.
Tripod: But is there really a crying need for this product? A lot of studies show that people don't really mind unobtrusive ad banners. I sometimes click on them myself, and I've discovered some dynamite websites like Women's Wire that way. There's even a new company called CyberGold that is going to start paying people to view advertisements; if you click on an ad you get like fifty cents in cybercash.
Howard: I thought that was hilarious -- another example of ad people who don't understand the world of hackers and computers. What's to stop somebody from writing a little script that goes out at night, clicks on 500 ads while you're sleeping, and presents you with a nice little paycheck in the morning? Not that I would do that or anything, but I'm sure somebody will.
Tripod: Some people would say that what you have created is just as mean-spirited, though. A lot of small service providers and publishers starting up on the Web are depending on advertising for at least part of their revenue -- and to make websurfers aware of their sites. These folks are justifiably up in arms about IFF. What would your response be if you could talk to these people directly?
Howard: The problem is that the Internet is the first medium in which the consumers have complete control over what they see. They don't have that control in print, television, or radio. I would just say, "Sorry guys -- this just kind of comes with the territory." Publishers may eventually have to go with subscription-based services. Still, I don't think everybody in the world is going to be using our program, because there are some people out there who like to see advertisements. When I'm in the office on the T1, I don't mind the advertisements unless they're just really annoying and blinking and flashing, but when I'm on a modem I don't want to wait for that stuff to download. It could turn out that advertising as the basis for all revenue for the Internet is a bad idea. It seems to be the only idea they have right now, so they're kind of worried about it, but the Web or the Internet is not going to die because of this program. The Web has been around before any sort of advertising existed on it, and the Internet has been around for 20-something years. Nothing I could write is going to destroy the Web. Some companies that have based their revenue models totally on advertising may not be around in a year. That's happening anyway -- Web Review has said that advertising just doesn't foot the bill. The thing about Web advertising is that you see all these rates of $30,000 a month for an ad, but when you really dig into it deeply you find out that a lot of these companies aren't really paying for them. There's a lot of bartering and trade-outs going on, and not a whole of money actually changing hands. I think they're not getting as much money from advertising as they'd like people to think.
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We don't think that the occasional ad that slips through is going to be as traumatizing as, say, six-year-old Jimmy coming across a bestiality picture or something like that.
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Tripod: One of the slogans on your page is "If it's out there, we can
filter it." What other things might you like to filter?
Howard: Well, there's an industry completely built on filtering out pornography,
so we haven't gotten into that because the market is saturated and none of those products work. The difference between filtering pornography and filtering advertisements is that the amount of new pornography that appears on the 'Net daily is unbelievable -- and unless you want to have a staff of thousands to go out and catalog it all, you can never get it all. The amount of new advertising that appears on the 'Net is limited to about 50 or 100 sites, and they actually sell subscription services telling you what new sites have started having advertisements this month -- and where they're located. They're a godsend for us. The thing is, you can pretty much cover all the advertising with six guys and make a product that will actually work. We don't think that the occasional ad that slips through is going to be as traumatizing as, say, six-year-old Jimmy coming across a bestiality picture or something like that. I'm sure we could and turn a fast buck and tell everybody that everything's going to be alright, but we couldn't do it with a straight face because it's not really possible to write a program like that that works: they're all pretty much hot air at this point.
Tripod: Earlier, you mentioned the radio host who was paranoid about cookies. It would be possible to say that some of the content on your web page plays into that paranoia more than a bit. In our discussion, you have talked a lot about Fast Forward being a time-saver and nuisance-remover, yet your pages seem to indicate that your mission is to ensure anonymous movement on the Internet. Which is it?
Howard: Our page used to say "protecting your privacy on the Internet." We changed that to "if it's out there, we can filter it." That's a little more friendly, I think. In the future when our main product is PrivMail, then our main focus will be protecting the privacy of the user. With IFF, you can set it to block all the cookies or you can make it block cookies only from certain domains: maybe you'll let a cookie through on the Wall Street Journal site but everywhere else you'll allow no cookies at all. The thing is, cookies aren't that dangerous right now. I mean nobody's really abused the hell out of them yet, so right now IFF is mainly a time-saver instead of a "protecting your privacy" issue.
NEXT WEEK: In Part Two of Tripod's interview with James Howard, the young entrepreneur discusses the insane life of an Internet software start-up.
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