Microsoft's data mining idea

This is just the kind of thing I wrote about in my book:
Microsoft ponders offline profiling of Web users

By John Letzing, MarketWatch

Last update: 7:02 p.m. EST Jan. 23, 2008

SAN FRANCISCO (MarketWatch) -- Microsoft Corp. is developing a method of using personal data such as credit-card information to target Internet users with advertising once they connect to the Web, according to a patent application filed by the company.

In an application disclosed earlier this month, a Microsoft team including Chairman Bill Gates presents a method of collecting information about users' "cell phones, geolocation systems, credit-card information" and other data sources to select and display "targeted advertising."

The technology described in the patent application touches on a delicate issue for Microsoft and other online companies such as Google Inc.

Microsoft and its rivals have all sought to gather increasing amounts of personal information about Internet users to deliver advertisements more likely to draw attention. That's because the companies generally earn revenue only when a user clicks on an ad.

Microsoft director of privacy strategy Brendon Lynch said patent applications don't necessarily indicate product plans for the company. But if Microsoft does develop a product based on the new patent application, Lynch said it "will first be reviewed against our privacy standards to ensure that privacy is protected."

Google is currently facing questions in Europe about its own collection of user data.

Bill Gates is listed as an inventor on the patent application, alongside members of various Microsoft research units.

The European Parliament held a public seminar Monday to discuss the privacy implications of technology used by Google, Microsoft, Yahoo and others.

"We put great effort into building privacy protections into our products and systems," Google privacy counsel Peter Fleischer wrote in a blog post related to the seminar.

In addition, the European Commission is considering the approval of Google's acquisition of online-advertising firm DoubleClick, a move that many say would unfairly expand Google's store of user data.

In Microsoft's patent application, the company describes a technology that can first better align search results with a users' offline behavior. Then, according to the application, "an advertising component employs the user profile in connection with the delivery of an advertisement."

Offline behavior can include credit-card information such as types of purchases and "payment history," according to the application.

Data relayed by cell-phone towers can also be tapped to locate users, and "tailor search and advertising during online experiences so as to better interpret queries to search engines, to better target advertisements," the application said.

In addition to cell-phone and credit-card use, other offline behavior that can be monitored includes TV-watching habits, the patent forms say.

"If the offline behavior indicates the user was watching a college football game ... if the user goes online during or just after such activity, then an inference could be made that the user is interested in seeing more information about the game as well as being receptive to advertisements selling college-team memorabilia," according to the application.

Gates is listed as an inventor on the patent application, alongside members of various Microsoft research units.

It increasingly has become common for Gates to be listed as an inventor on Microsoft's patent applications, according to public filings. Gates, who co-founded the company in 1975, is expected to step back from his day-to-day role at Microsoft in July to focus more on philanthropy.

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