What If Web Users Could Sell Their Own Data?

By JESSICA BRUDER

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The adventure of new ventures.

Two-thirds of Americans don't want advertisers tracking them on the Internet, according to researchers at the University of Pennsylvania and the University of California. But that hasn't slowed the growth of online behavioral advertising, the industry that harvests data about Web habits and uses it to target individual consumers with ads.

For advertisers, “data exhaust” â€" the digital traces you generate while browsing the Web â€" has monetary value. Often, the information gets collected and sold behind the user's back. But what if users could cash in on their own data?

Enter Enliken, a start-up that encourages consumers to sell their own data. Enliken's users voluntarily download software that tracks their online activity. A personal dashboard lets them limit what gets cap tured and sold to advertisers. Users pick one of several independent charities to receive the proceeds, while Enliken takes a 10-percent cut. The company's founders hope that, someday, users will be able to earn a wide range of perks â€" from airline miles to online news subscriptions â€" in exchange for their information.

Employees: Three full-time and five part-time.

Location: Brooklyn and Seattle

Co-Founders: Marc Guldimann and Avniel Dravid, both 33, lived on the same floor during their freshman year at Carnegie Mellon. Mr. Guldimann went on to co-found Spongecell, an online advertising developer that later raised more than $10 million from investors, including Eric E. Schmidt, Google's executive chairman. Mr. Dravid earned an M.B.A. and held jobs in software development and venture capital. The two remained friends and, last year, teamed up to start Enliken.

Pitch: “We see data as a currency. Why don't we help the people who are creating the information monetize it?” Mr. Guldimann said. “Enliken enables people to control and use their own data. We capture the value created by its use. We think that letting individuals offer a competing product in the marketplace for consumer data is the most efficient and least destructive way to move the Internet to a privacy-friendly space.”

Traction: So far, Enliken has partnered with 10 nonprofit organizations, including Autism Speaks, an advocacy group, and Soles4Souls, a charity that donates shoes to people in need. These groups will reap most of the proceeds from users' data sales. Enliken is also working with search retargeting firms, including Magnetic, that buy behavioral data and use it to place online ads. Enliken would not disclose how many users have signed up to be tracked so far.

Revenue: None yet. But Mr. Guldimann believes the data he gathers will be worth $1 a user a month.

Financing: Enliken raised $200,000 in seed funding this summer. The company is now seeking a second round of investment between $500,000 and $750,000.

Marketing: The co-founders have been courting new charities. If their system works, these nonprofit partners will do a large part of Enliken's marketing, by bringing new users into the system and earning money off their data. “Not only are we helping these nonprofits generate a new form of revenue, we're helping them learn about their audience,” Mr. Guldimann said. “They can learn more about what types of Web sites they should advertise on to reach more constituents.” Enliken is also trying to woo consumers directly. At the end of last month, the company unveiled a new feature â€" “Enliken for the People” - that allows users to see what elements of their personal information other companies are harvesting. (To access this feature, users must install Enliken's own tracking software.)

Competition: Start-ups like BlueKai and eXelate have al ready raised tens of millions of dollars in financing to run “data exchanges” that quietly pipe consumer information to advertisers. (BlueKai's motto? “Care datum,” or “seize the data.”) But Mr. Guldimann said these companies offer a hodgepodge of behavioral data collected from a smattering of Web sites that track users. Enliken's system, he said, will offer a wide-angle, seamless view of online behavior via its Web-browser plug-in, which watches users everywhere they go.

Other start-ups have emerged to let consumers broker their own information. But Mr. Guldimann thinks Enliken will prevail by creating less friction. “We don't require any change in behavior. You install the plug-in and then you're done,” he said. “You sign up for something like Personal.com and they're like, ‘Please fill out 500 things about yourself.'”

Challenge: Enliken faces a twofold challenge. First, will the company's estimate of the value to advertisers of a user's o nline data â€"  $1 per person per month or $12 a year - be enough to convince users to sign up for tracking? The modest return, Mr. Guldimann said, will be mitigated by how easy it will be to claim. “It's basically found money, with very little effort,” he said, adding that avid online shoppers may earn more because they generate more data. He also believes the value of the data is likely to rise over time as both e-commerce and advertising models evolve.

The second hurdle is that people remain wary of anything related to online surveillance. Internet privacy advocates and federal legislators are lobbying for a range of antitracking policies; in a landmark move, Microsoft wooed skeptical consumers over the summer by announcing that “do not track” settings would be enabled by default in the latest version of Internet Explorer.

Can Enliken win over people who don't want their online behavior captured and monetized, even if they get a cut of the cash? Mr. G uldimann hopes to change hearts and minds by giving consumers more control. “What we have is a classic human nature thing going on,” he said. “As something new appears, you're scared of it. You don't understand it. You want it to go away. You want to cover your ears and sing. But as humans get educated about something, they move from a place of fear to a place where they want control over it. When you empower people to control something, you make them feel good. It's a chemical reaction in their head. They're like, ‘This makes me feel great. I'm going to share more information because I feel in control.'”

What do you think?

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